Apr 3, 2023 - Economy

Online retailer Boxed is latest SPAC tie-up to file for bankruptcy

Kia Kokalitcheva

Illustration of green tape making the shape of a dollar sign on a stack of boxes. — Illustration: Gabriella Turrisi/Axios

On Sunday, online retailer Boxed became the latest company that's gone public via merging with a special purpose acquisition company to file for bankruptcy.

Why it matters: At least nine such companies have now filed for bankruptcy — a rather dramatic outcome for companies that took part in the pandemic-era market boom.

Details: Boxed, founded in 2013 as an online bulk retailer, said on Sunday that it's filing for Chapter 11 bankruptcy protection and will execute a sale of its Spresso software business to its first-lien secured lenders.

It listed $102.6 million in assets and $190.4 million in liabilities in the filings.
It will also wind down its retail business.
The company announced a $20 million cash infusion in January and had been working with Solomon Partners to sell itself.

The big picture: Other companies that have filed for bankruptcy include Starry Group, Quanergy, Enjoy Technology, Electric Last Mile, Rockley Photonics, Clarus Therapeutics, Core Scientific and Fast Radius.

Of these, all but Rockley Photonics filed for bankruptcy within a year after their public market debut, according to Bloomberg.

Between the lines: While the SPAC mania attempted to reverse the two-decade-long trend of companies taking longer to go public, it's now shown that not all companies are fit to be public.

In addition to bankruptcies, a number of companies that merged with SPACs have since been taken private, often at prices smaller than what they were worth when first listed.

The bottom line: The SPAC ascent back down to Earth is not over yet.

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Online retailer Boxed is latest SPAC tie-up to file for bankruptcy

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