Brandless is the first SoftBank-backed startup to close its doors for good

Brandless, a San Francisco-based e-commerce site selling unbranded household products, is shuttering operations. The company has been in hot water for about a year, undergoing layoffs, facing quality problems, and losing money from high shipping costs.

Brandless was SoftBank’s second e-commerce investment in the U.S. The Japanese tech behemoth pledged $240 million into the company in 2018 with hopes that it could go head-to-head with Amazon. The funding valued Brandless at $500 million. SoftBank had set up its investment as a number of installments so that it would provide cash only when the company hit specific financial targets. 

Brandless couldn’t deliver. Its board ultimately decided to shut down the company and use the remaining capital to pay employee severance, according to Protocol. Only 10 employees will remain to fulfill outstanding orders and handle customer service. 

The company has had a rough ride ever since it laid off 13% of its staff in 2019 and CEO Tina Sharkey resigned as a result of a rocky relationship with SoftBank. 

This is the first SoftBank-backed startup to completely shutter. And it’s a good reminder that a sizable portion of a venture firm’s portfolio companies can go bust. But when that firm’s minimum check size is $100 million, things get hairy. If several more of SoftBank’s portfolio companies shut their doors, the ripple effects of the implosions will be much wider and much more severe than we’ve seen before.

THIS JUST IN: A U.S. District judge ruled in favor of T-Mobile and Sprint’s merger in an all-stock deal of $26 billion. In his ruling, Judge Victor Marrero disagreed with a group of state attorneys general who had argued that a merger of two of the largest U.S. wireless companies should be blocked because it would lead to higher prices for consumers.

This deal was blocked four years ago by regulators in the Obama administration. But company officials have since spent quite an effort wooing the Trump administration with its 5G network promises at a time when the White House views the wireless network crucial for the country’s economic and national security.

Polina Marinova
Twitter: @polina_marinova


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