Interesting piece in The Information that looks at the financial twists and turns being taken by Good Eggs, a 12-year-old e-grocery company that has been struggling to stay afloat.
"As more startups struggle to raise money from venture capitalists and approach bankruptcy, they are going to extreme lengths to stay afloat. The latest example is Good Eggs, which delivers fresh produce and other groceries.
"The company this month raised around $7 million from Greenwich, Conn., hedge fund Glade Brook Capital Partners at a pre-investment valuation of $15 million, said two people with knowledge of the deal. That represents a 94% valuation drop from late 2020, when the pandemic boosted food-delivery services and the startup raised $60 million at a pre-investment valuation of $270 million, one of these people said. The new deal also effectively wiped out the value of stakes held by earlier investors such as Benchmark that chose not to contribute more money."
And sources provide some context:
"Good Eggs grew revenue to more than $100 million in 2020 from $59 million in 2019 as the pandemic prompted customers to buy food online, said a person with knowledge of the company. Revenue peaked at $106 million in 2021 before falling 18% to $86 million in 2022 while the company’s negative profit margins and cash burn worsened, this person said. The results suggest that the company didn’t move quickly to cut costs as its business declined."
Recently, the story says, "Good Eggs was generating more than $6.5 million in monthly revenue—a pace of $80 million annually—and has dropped its monthly cash burn to around $1 million this month from $2.5 million per month late last year by raising prices and making cuts, such as reducing sales and marketing costs, this person said. The company has $28 million in debt, including from Silicon Valley Bank and TriplePoint Capital, but has struck an arrangement that allows it to not make principal payments for the next 18 months and lowers its interest payments more than 40%, this person said."
You can read the entire story here.