WASHINGTON (dpa-AFX) - The SoftBank-backed online retailer Brandless, Inc. is closing down its operations just two and a half years after it was launched, as it was unable to sustain itself in the fiercely competitive direct-to-consumer market.
Once known as an alternative to market leader Amazon.com and a disrupter of the traditional grocery industry, Brandless was trying to set a new bar for the types of products consumers deserve and at prices they expect. However, its current business model has proven unsustainable in the competitive market.
Brandless developed high-quality organic products, but priced them cheaper than what you might find at other similar grocery retailers such as Whole Foods. They managed to put a hold on the pricing due to the cutting out of hidden middlemen in the entire supply chain.
They initially began with a limited range of products priced at $3 each. Later, they expanded to more expensive products and priced them in multiples of $3, while also remaining a low-cost simple alternative. They adopted simple packaging and minimal labeling.
A post on the company's website said, 'To all of our customers: thank you for trusting Brandless to bring you innovative products created with quality materials and clean ingredients that help you live well and take better care of yourself, your family and your home.'
The company's downfall began after the Japanese conglomerate SoftBank participated in its Series C funding round and invested $240 million in the company in July 2018. The investment by SoftBank was part of its $100 billion Vision Fund, which also saw investments in other startups such as Wag, WeWork and Uber.
Following the fund infusion, Brandless underwent major changes in its operations as SoftBank was pushing the online retailer to meet difficult financial targets to see it swinging to profit quickly. The company also saw major leadership changes, with its co-founder and CEO Tina Sharkey resigning from her role in March 2019, while staying on the Board.
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