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BFD Expert Voices - Retail Deals

BFD Expert Voices

Outerspace, a fulfillment and logistics company, raised $30 million in a Series B round, co-founder and CEO Ricky Choi tells Kimberly.

Why it matters: As more digital consumer brands run their e-commerce businesses through a warehouse, Outerspace is touching on a need for companies to tailor those spaces to better fulfill customer orders and improve customer service.

Context: The round, which is led by Prysm Capital with the participation of existing investors, brings its total funding to just over $40 million.

Prysm is also a backer of Rivian and Everly Health.

Details: The funding will go toward expanding the company’s footprint and enhancing its software product.

The company expects to cross $100 million in cumulative revenue this year, Choi says.

How it works: Choi, who founded men’s underwear and socks brand Nice Laundry in 2013 alongside Phil Moldavski (also an Outerspace founder), says he started by building a fulfillment center in-house for his brand that had tons of office space, a photo studio and lots of the cross-functional resources that a brand needs. 

“You’re doing a lot more individual things — tissue paper — things like that,” he says.

Companies are able to deliver a better customer service response with this approach, Choi says, such as being able to switch out a product or change a shipping address in real time.

Of note: The idea has caught on with brands such as Jay-Z’s Paper Planes, Homesick Candles, Hill House and a host of others.

What’s next: “We recognized early on that real estate was going to be an important component to this business,” Choi says. 

One of Outerspace’s early investors is Tishman Capital Partners and it also counts Benjamin Harris, the former CEO of Link Logistics Real Estate, Blackstone’s U.S. industrial sector operating platform, as one of its independent board members. 

Together, they’ve helped the company navigate this tight industrial real estate market, Choi says.

The bottom line: Outerspace has about half a million square feet in real estate space. Choi expects the company to reach a million square feet by next year's first quarter.

1 big thing: Funding e-commerce fulfillment 

Misfits Markets, the company known for selling ugly produce, is planting the seed to go public. Its founder and CEO, Abhi Ramesh, tells Richard that the timing for such a move is after the fall.

Of note: Misfits has raised $526 million in funding and generates hundreds of millions in sales, Ramesh says.

Misfits raised a $225 million Series C-1 round led by Softbank Vision Fund 2 at a $2 billion valuation, the company announced in September.

Details: "It would be challenging to IPO right now," Ramesh pointed out, adding that the markets need to settle first. 

Valuation multiples are in flux due to volatility.  The company has made preparations to float but has not chosen banks, he said. 

The opportunity: The company's marketplace has grown nearly 50% in both sales and customers from Q4 of 2021 to Q1 of 2022, a spokesperson said.

2. The BFD: Misfits Market's timing 

Photo: Cooper Neill/Getty Images for Misfits Market

Reproduced from Morning Consult; Chart: Axios Visuals

Nearly half of the U.S. population is engaged in either the buying or the selling of secondhand goods, according to a recent study conducted by Morning Consult.

Between the lines: ThredUp projects that the resale (or re-commerce) category's sales will more than double to $77 billion by 2025.

Our thought bubble: This newsletter covers many types of deals, including actual clothing bargains.

3. Charted: Hand-me-down chic

• Glanbia (Dublin: GL9) is being pressured by activist investor Clearway Capital to spin off some of its branded businesses, including SlimFast. http://axios.link/bl0g

• Motif Foodworks, the Boston-based food technology company, has invested and partnered with microfluidic screening platform NemaLife for an undisclosed sum. http://axios.link/9Nmw

• F!VE, the ready-to-drink cocktail company, has merged with Better Drinks of Brazil. http://axios.link/XMbo 

• Tengiva, a “Shopify for the textile industry,” raised nearly C$5m in seed funding. Fonds Ecofuel led, and was joined by Inovia, Anges Québec, Active Impact Investments and N49P. www.tengiva.com

• Publicis (Paris: PUBP) will pay €200m to buy Profitero, a Boston-based e-commerce intelligence software firm that raised around $30m from firms like Polaris Partners. http://axios.link/YHa1

• Hungry, an Arlington, Va.-based food catering and delivery platform that’s raised over $60m, bought NatureBox, a Redwood City, Calif.-based healthy snacks subscription box service. http://axios.link/LxtK

• Upgrade, an online wig and hair care product company, announced a $1m seed extension. The funding was supported by initial seed leads The Artemis Fund and Mercury Fund, the notable, Bracken P. Darrell and ANIM. http://upgradeboutique.com/

4. Retail transactions

• Conagra Brands has named McDonald’s vet Lucy Brady as its president of grocery and snacks, effective June 15. http://axios.link/goFo 

• Tupperware named Calavo Growers CFO Mariela Matute as its new finance chief. http://axios.link/ibAY

• Walgreens announced three executive moves. It named as its new CMO Linh Peters, who most recently held the same role at Calvin Klein. The drug store chain also promoted Luke Rauch, recently CEO Roz Brewer's chief of staff, to chief merchandising officer. And it appointed Bala Visalatha to the new role of chief product officer. He was most recently VP of e-commerce at Walmart U.S. All three will begin their roles this month. http://axios.link/l89v

• Denny’s named Kelli Valade as its next CEO, effective June 13, succeeding John Miller, who plans to retire. http://axios.link/J5JO 

• Mattress company Purple has named Ecolab vet Eric Haynor as its COO, effective June 6. http://axios.link/shha

• Helen of Troy has named Stanley Black & Decker exec Tabata Gomez and Clorox vet Elena Otera to its board of directors, effective Tuesday. http://axios.link/Pl8d 

5. It's Personnel

Situational awareness: Glass Lewis is backing Kohl’s director slate.

Axios Pro tomorrow hosts a pair of live, interactive virtual events:

🌎 Climate Deals at 12:30pm ET with Jigar Shah, director of the Loan Programs Office at the Department of Energy. Register.

📺 Media Deals at 2:30pm ET with Linda Yaccarino, NBCUniversal's chair of global advertising and partnerships. Register.

May 04, 2022

1 big thing: Funding e-commerce fulfillment