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.
- Sanity Group, a Germany-based medical cannabis and wellness brand, raised $22 million in Series A funding. Calyx led the round, and was joined by investors including HV Holtzbrinck Ventures.
- Impala, a London-based platform that provides real-time data about hotel rooms, raised $20 million in Series B funding. Lakestar led the round, and was joined by investors including Latitude Ventures.
- Unmind, a London-based workplace mental health platform, raised $10 million in Series A funding. Project A led the round, and was joined by investors including Felix Capital.
- EquityBee, a Los Angeles-based startup that helps employees with stock options funding, raised $6.6 million in funding. Group11 led the round, and was joined by investors including Battery Ventures and LocalGlobe.
PRIVATE EQUITY DEALS
- Sycamore Partners is nearing a deal to acquire Victoria's Secret, an Ohio-based retailer of apparel, lingerie, and personal care products for women, from L Brands. Financial terms weren't disclosed. Read more.
- Smith System Driver Improvement Institute, a portfolio company of Levine Leichtman Capital Partners acquired Driver’s Alert, a provider of fleet safety management solutions. Financial terms weren't disclosed.
- Route 2 Capital Partners and Alturus Strategic Capital Partners made an investment in Reliance Aircraft International, an Austin, Texas-based aftermarket commercial and military airframe/engine spare parts supply company. Financial terms weren't disclosed.
- Nili Capital Partners recapitalized eScribers, a New Rochelle, N.Y.-based provider of legal transcription services. Financial terms weren't disclosed.
- Gryphon Investors agreed to invest in Pacur, LLC, an Oshkosh, Wisc.-based supplier of specialty plastic packaging materials for the medical device industry. Financial terms weren't disclosed.
- The W.W. Williams Company, a portfolio company of One Equity Partners acquired CP Company, which does business as CT Power, Inc. and Iceberg Enterprises. Financial terms weren't disclosed.
- Banco Daycoval, a Brazilian lender, filed for a IPO that could raise up to 4 billion reais ($925 million), Reuters reports. Read more.
- Revolution Medicines, a Redwood City, Calif.-based biotech developing targeted cancer therapies, says it plans to raise $231 million in an offering of 14 million shares priced between $16 to $17 apiece, a larger offering in an increased priced range. The firm posted revenue of $20.2 million and losses of $48.8 million in 2018. Third Rock Ventures (29% pre-IPO), The Column Group (19%), and Sanofi Research Invest (8%) back the firm. It plans to list on the Nasdaq as “RVMD.” Read more.
- TFI International, a Canadian transportation and logistics company in North America, filed for an $199 million U.S. IPO. It plans to offer 6 million shares priced at $33.15 apiece, based on its last closing price trading on the Toronto Stock Exchange. The firm posted revenue of CAD$5.2 billion ($3.9 billion) and income of CAD$310.3 million ($232.9 million) in 2019. It plans to list on the NYSE as “TFII.”
- SpaceX, Elon Musk’s space travel company, plans to spin out its space-internet business Starlink, via an IPO, Bloomberg reports. Read more.
- mCloud Technologies acquired AirFusion, a Boston-based provider of AI-based drone inspection of wind turbines and other energy facilities. Financial terms weren't disclosed.
- The PharmaLex Group acquired Arbour Group, an Oakbrook Terrace, Ill.-based provider of regulatory compliance technology and services, from Keystone Capital, Inc. Financial terms weren't disclosed.
- Infosys (NYSE: INFY) agreed to acquire Simplus, a Sandy, Utah-based provider of software as a service products and support services that streamline and simplify global enterprise work management processes. Financial terms weren't disclosed.
- Communication Technology Services, a Marlborough, Mass.-based provider of wireless infrastructure services, has received an equity investment, from Astra Partners I. Financial terms weren't disclosed.
FIRMS + FUNDS
- Equal Ventures, a New York-based venture capital firm, raised $56 million for its first fund, Equal Ventures Fund I.
- B Capital named Rashmi Gopinath as a general partner.
- Silicon Road Ventures named Ross Kimbel as a managing director and partner.
- Greenbriar Equity Group promoted Michael Weiss and Niall McComiskey to managing partner.
- Prelude Ventures promoted Victoria Beasley to partner.
- Sapphire Ventures promoted Abigail Johnson to managing director, general counsel and chief operating officer and Shruti Tournatory to vice president of business development.