- In an effort to accelerate its digitally native platform, Brandless on Wednesday announced it raised $118 million in equity and debt financing, according to a company press release.
- The round was led by Clarke Capital Partners, which acquired Brandless in 2020, and other corporate and institutional investors. Keystone National Group provided a senior debt facility.
- Brandless will use the money to acquire more digitally native brands to expand its product portfolio. It will also help the company invest in its social influencer initiative so individuals "can advocate for their favorite products and monetize their social presence," per the release.
Brandless is ready to grow.
The company, which focuses on consumer packaged goods in categories like beauty, personal care, wellness and home, has gone through a number of dramatic changes and iterations over recent years. Launched in 2017 as an all-private label consumer goods retailer, it initially had a $3 price tag for all goods and was poised to be a direct-to-consumer leader. That year, Retail Dive named the company "disruptor of the year" due to its product price point, business model and modern aesthetic.
By 2018, the company was struggling to retain shoppers and experiencing lower retention rates and order averages than Walmart, Target and Amazon. Brandless responded by launching into different categories including pet and baby, expanding its health and wellness assortment, raising its prices, opening a pop-up in New York City and starting a subscription service where shoppers could receive products at regular intervals.
But by 2020, the company had gone dark. The DTC retailer announced in February 2020 it would stop taking orders and halt business operations, even after reaching a $500 million valuation and receiving $300 million from investors, including SoftBank. "While the Brandless team set a new bar for the types of products consumers deserve and at prices they expect, the fiercely competitive direct-to-consumer market has proven unsustainable for our current business model," the company wrote in a statement posted to its website at the time of its closure.
Less than six months after going out of business, the company returned with new leadership and a smaller scale of product offerings. Capital Partners joined with Ikonifi to purchase the company's assets and relaunch Brandless.com. "Despite an ultra-loyal following, Brandless ran into challenges with profitability and mounting troubles with a distressed SoftBank," Clarke Capital Partners wrote in a statement announcing the acquisition.
Yet, its investors saw the company's potential, pointing to improved capital structure and a different pricing model. With its latest funding round it seems to be building off that vision.
"We have millions of customers, thousands of new product requests, hundreds of products and categories and dozens of marketplace partners," James Clarke, CEO of Clarke Capital, said in a statement. "We are committed to making it easy for people to make good choices when it comes to their health and well-being. Our acquisitions of better-for-you, digitally-native brands will expand our footprint."