Did we mention a few weeks ago that Boxed.com, the e-commerce grocery platform that has been around in the industry for last decade, is going to either sell its platform and other assets or file for bankruptcy if it comes to that? Yes, we did and it was mentioned in our report that sale of assets is not going as expected so it may come down to filing for bankruptcy as well. Unfortunately, we have to report that Boxed.com has had to file for Chapter 11 bankruptcy in the US which gives them certain protections but it is sad to see a company as good as Boxed having such an end.
Boxed’s CEO and Co-founder Chieh said in a statement, “This was an incredibly difficult decision, and one that we reached only after carefully evaluating and exhausting all available options,” He also explained that the company is looking to sell its software-as-a-service business named Spresso which serves multiple big name clients in the industry. It is worth noting that this condition of Boxed has been caused due to one big reason and this is a domino effect of that change that happened in the industry.
We are talking about the fallout of the Silicon Valley Bank and Boxed says that most of their assets were in the SVB bank which failed all of a sudden. It is also worth noting that they did mention most of their assets being recovered but it is still hard to keep the company running after such a big loss like this. It is worth noting that SVB has been sold to First Citizen Bank for much lower price than expected due to the debts that are yet to be recovered.
Talking about the bankruptcy, it is worth noting that Boxed will fund its near-term operations and cover administrative expenses through access to cash collateral as it closes and they also mention that the sale process of Spresso will be very smooth so that its customers don’t even get any disruptions due to the sale and they can go on with their daily operations as they already did.