Boxed, which is commonly referred to as a pure-play e-commerce version of Costco, said yesterday that it is acquiring MaxDelivery, described as "one of New York’s first on-demand grocery delivery services."
Terms of the deal, expected to close in the next month, were not disclosed.
The acquisition is expected to give Boxed the ability to "broaden its capabilities in micro dark-store fulfillment and rapid on-demand grocery delivery. Boxed customers in select markets will also enjoy a significantly expanded fresh assortment offering."
MaxDelivery, in addition to being able to access Boxed’s Software & Services, "adopting its proprietary commerce technology to help enable scalability of its operations," now is expected to be able to expand into additional markets over time.
MaxDelivery describes its business model this way: "MaxDelivery provides New Yorkers with a fast, easy, and convenient way to have a broad assortment of groceries delivered directly to their door on-demand, through its one-hour delivery service in Manhattan. Since its inception in 2004, MaxDelivery has consistently delivered premium quality service to its customers, processing approximately 2 million orders to date. MaxDelivery differentiates itself from other ultrafast delivery businesses due to its high average order values of approximately $100, helping yield a history of strong unit economics."
Chieh Huang, Co-founder and Chief Executive Officer of Boxed, said in a prepared statement that "this acquisition of MaxDelivery will mark our entry point into the rapidly growing fast-grocery delivery space, in addition to broadening our capabilities in micro dark-store fulfillment and fresh supply chain. Boxed customers have expressed how they value fresh groceries and we are excited to be able to deliver a more comprehensive product offering while benefiting from a complimentary business model with similarly high average order values as Boxed."
Earlier this year, Boxed entered into an agreement with Seven Oaks Acquisition Corp. that will enable it to go public at some point, probably in the near future.
- KC's View:
The betting here just a few years ago was that it seemed likely that Boxed would get acquired by someone, so it is something of a surprise that it is doing the buying, not selling.
I do know this: Mrs. Content Guy is a huge Boxed fan, and for a lot of bulk items uses it more than she does Amazon. I'll be curious to see the degree to which Boxed tries to engage with her and created expanded usage.