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8fig, which offers tools and financing to online retailers for supply chain management, raised a $140 million Series B round, co-founder Roei Yellin tells Richard.

Why it matters: The Austin, Texas-based startup provides financing for early-stage e-commerce companies at a time when working capital is limited and expensive.

Details: The Series B includes a $100 million credit facility being provided by Silicon Valley Bank, a division of First Citizens Bank, Yellin says.

The aim of the credit facility specifically is to deploy more capital to clients, he says.

It also includes $40 million in equity financing led by Koch Disruptive Technologies with participation from existing investors Battery Ventures, Localglobe, Hetz and the Jesselson family, he says.

Proceeds from the equity raise will be invested in the startup's growth efforts, particularly its product offering.

It brings 8fig's total funding to $196.5 million, according to an announcement emailed by the company.

How it works: The idea is to help online sellers with six-figure sales turn into ones with eight-figure sales, Yellin explains.

Non-secured financing is provided incrementally on an as-needed basis to primarily fund inventory, he says.

For every $100 lent to produce a startup's goods, 8fig gets $108 to $110 back as the inventory is sold.

As a result, an online seller's growth is not limited due to a lack of inventory or stockouts.

Zoom in: 8fig's AI CXO technology also makes automated decisions using real-time sales, inventory and supply chain data to help sellers react faster, according to the company.

The average client has 53 supply chain events in a year that generate about $2.5 million in sales.

8fig's CXO consolidates these events into a single business plan, per the company.

Catch up fast: 8fig, which also has operations in Tel Aviv, Israel, was co-founded by CEO Yaron Shapira, CTO Assaf Dagan and CRO Roei Yellin in 2020.

1 big thing: Financing startup 8fig raises $140M

8fig co-founders, from L to R, are Assaf Dagan, Roei Yellin and Yaron Shapira. Photo: Courtesy of 8fig

Tempur Sealy, a Lexington, Ky.-based mattress manufacturer, agreed to acquire retailer Mattress Firm for $4 billion, the companies announced this morning.

Why it's the BFD: To succeed in a post-pandemic world, retailers need to be omnichannel, and this deal provides Tempur Sealy with a little bit of everything, Richard writes.

Of note: Tempur Sealy has received a request for additional information from the Federal Trade Commission in connection with its review of the deal.

The company plans to work with the FTC, it says.

Details: The transaction will be financed with about $2.7 billion in cash, which includes the replacement of Mattress Firm's debt.

It also involves $1.3 billion of Tempur Sealy stock, based on the issuance of 34.2 million shares (or a 16.6% stake) at a May 8 closing price of $37.62, which will be meted out to the target's shareholders.

The deal is expected to close in the second half of 2024, after which Mattress Firm will operate as a separate business unit within the company.

The acquirer claims it can extract $100 million in cost-saving synergies and will have net leverage of between 3x and 3.25x adjusted EBITDA.

Together, Tempur Sealy and Mattress Firm will have a combined global retail footprint of 3,000 stores, 30 e-commerce platforms, 71 manufacturing facilities, and four R&D facilities.

"Being closer to the U.S. bedding consumer will also broaden opportunities to develop lifetime relationships with consumers," Tempur Sealy stated.

Catch up fast: The mattress retailer was founded in 1986 and operates 2,300 stores and an e-commerce platform.

Mattress Firm filed for bankruptcy in 2018 only to emerge one month later.

Parent Steinhoff International, which has been trying to avoid bankruptcy, owns 50% of the business, according to its website.

The mattress retailer had filed for an IPO but asked the SEC to withdraw its registration in January.

What they're saying: "Consistent with our M&A strategy, this acquisition will make Tempur Sealy more competitive by bringing us closer to consumers and facilitating continued innovation," Tempur Sealy CEO Scott Thompson said in a statement.

2. The BFD: Tempur Sealy to acquire Mattress Firm for $4B

A storefront for mattress retailer Mattress Firm.

Photo: David Paul Morris/Bloomberg via Getty Images

Mother Science, a skin care company founded by Incubus guitarist Mike Einziger and Ann Marie Simpson-Einziger, a violinist and the guitarist's wife, is debuting its first product aimed at skin hyperpigmentation.

Why it matters: The company, which the pair of world-famous musicians and serial entrepreneurs founded in 2021, has raised $6.2 million in total venture capital (most of it in a seed round last November), Axios' Kia Kokalitcheva writes.

The big picture: Mother Science says it’s a skin care company built on novel scientific research.

After Simpson-Einziger developed some light skin patches while traveling, the pair dove into some research and stumbled upon malassezin, a compound produced by Malassezia furfur and other species of that yeast that's naturally found on human skin.

After a few years of research, they formed the company and hired Jessica Goldin, a beauty industry veteran and former CEO of Shani Darden Skin Care, to run the venture.  In fact, Mother Science's founders have known Olaplex CEO JuE Wong for years, says Goldin. 

3. Retail therapy

Illustration of a paper shopping bag wearing a clay mask and cucumber slices with a jar of mask clay next to it

• Pando, a startup developing fulfillment management technologies, raised a $30m Series B, led by Iron Pillar and Uncorrelated Ventures, with participation from existing investors Nexus Venture Partners, Chiratae Ventures and Next47. https://axios.link/41nYR86

• Prewave, an Austrian supply chain tech startup, raised €18m in Series A+ funding from backers like Creandum. https://axios.link/3VN6tjb

• Intrinsic, a New York-based women's health and wellness brand, raised $15m in equity and debt, per Axios Pro. FCA Venture Partners and MAP Investco co-led, and were joined by Define Ventures, Link Ventures and Redesign Health. https://axios.link/42bScPq

• Sourse, a chocolate supplements brand, raised $2.4 million in seed funding from New Theory Ventures, H Ventures, JAWS Ventures, Satori Capital, Short List Capital, Harlo Capital and LDR Ventures. Model Sanne Vloet and gluten-free wellness influencer Nicole Cogan also participated. https://axios.link/3B8yRD3

• Hero Bread, a provider of better-for-you bread and baked goods, raises a Series B — bringing the company’s total funding to $47.5m — from Cleveland Avenue, DNS Capital, Union Grove Venture Partners, Composite Ventures, GreatPoint Ventures and The D'Amelio Family Fund, 444 Capital

• Yellow Wood Partners completed its buyout of beauty and personal care brand Suave in North America from Unilever (LSE: ULVR). https://axios.link/3XwHdx4

• JD Sports (LSE: JD) agreed to buy French sneaker retailer Courir for €520m from Equistone Partners Europe. https://axios.link/3Bd8H1O

• Shopify (NYSE: SHOP) sold 6 River System, a Waltham, Mass.-based warehouse automation it bought for around $400m in 2019, to Ocado Group (LSE: OCDO) for an undisclosed amount. https://axios.link/42CsyDv

• The Duckhorn Portfolio, a North American wine company, agreed to acquire North Coast Winery and Vineyards for $55M. https://axios.link/3BaRk1G

• NB Renaissance, an investment firm, agreed to acquire Italy-based U-Power, which makes protective shoes and boots for workers. https://axios.link/3nM5jbq

• Gryphon Investors, a private equity firm, acquired pet health products company Vetnique Labs. https://axios.link/3HVtA5v

• 1-800-flowers.com, a provider of gift baskets and flowers, acquired SmartGift. https://axios.link/41s0d1S

• Lolë, a global athleisure, active and outwear apparel brand, acquired époque évolution, an upscale, female-founded collection of everyday essentials for women. https://axios.link/44J39cX

• Nexa Equity acquired a majority stake in Storewise, an Overland Park, Kan.-based provider of retail automation software for independent grocers. www.storewise.io

• A&M Capital Europe, a London-based middle-market private equity firm, acquired a majority stake in World of Sweets and Bobby’s (together IBG), from Sculptor Capital Management. https://axios.link/3pog9Vq

4. Retail transactions

• Guess, the Los Angeles-based denim brand, has named Markus Neubrand as CFO, succeeding Dennis Secor. Neubrand was recently CFO of MCM Worldwide. https://axios.link/41eSK5T

• Therabody, the Los Angeles-based wellness technology provider, has named Jim Allwein as CFO. https://axios.link/42W9pN9

• Foot Locker, the New York City-based sneaker retailer, has appointed Blanca Gonzalez as SVP and general manager of WSS banner. https://axios.link/3BfvzxH

• BJ’s Wholesale Club, the Marlborough, Mass.-based discounter, has named CEO Bob Eddy as chairman replacing Chris Baldwin. https://axios.link/3ppZjFP

• Wonder, a New York City-based restaurant delivery service, has named Daniel Shlossman CMO, poaching him from salad chain Sweetgreen, Restaurant Dive reports. https://axios.link/41gp9cl

• Salad and Go, a Phoenix-based salad chain, named Corey Horsch CFO. He was previously CFO of Gordon Ramsay North America.  ​​https://axios.link/42ki1gn

5. It's Personnel

Happy Retail Tech Tuesday, Retail readers.

💸 Mark your calendars: Our annual dealmakers event Axios BFD is heading to San Francisco tomorrow! You’ll hear from big names in Silicon Valley and beyond on the news and trends driving headlines, markets and deals. The livestream starts at 2pm PT — register to join us virtually.

🛫 What we're doing: Kim and Richard are en-route to the city by the Bay for BFD!

✏️ Many thanks to newsletter editor Claire Rychlewski and copy editor Mickey Meece for today's edits.

May 09, 2023

1 big thing: Financing startup 8fig raises $140M