Brandless is a startup that is presently selling products, and all kinds of it, at just $3. Yesterday, July 31, it announced its receival of the investment amounting to $240 million by Vision Fund of SoftBank. This deal values the startup at over $500 million.
Brandless founders have astonished the tough nut in SoftBank’s CEO Masayoshi Son by informing him about the products they are selling, and all of those are for $3. Some of these products are carbon-steel eyelash curler, extra-virgin olive oil, toothpaste, tree-free toilet paper, coaster, bathroom suite, and more of such home-goods. Also, these are branded by only Brandless and none other!
Amazon is not their direct competitor. Amazon is the everything store. We’re a highly curated collection. – Tina Sharkey, Brandless CEO
She founded iVillage, the online media network, led BabyCenter the parenting site, and started Brandless in 2014 with Ido Leffler the retail veteran from Australia. Their site was launched last year.
Before the massive break of investment from SoftBank, the startup was able to fast gain $51 million in three funding rounds that include Redpoint, NEA, GV, and even Nicky Young and Steph Curry, the NBA champions.
Sharkey did not provide info on revenue and customer data, but her target is building a community out of buyers familiar with BabyCenter and iVillage connoisseur. Jeff Housenbold, the managing partner for SoftBank joined the board of Brandless and said that the latter’s key selling points are its ability to generate buzz on everyday items.
Given that, the no brand startup faces challenges on the fact that its raw items have low-profit margins as those are expensive in shipment.
They need to get people to add lots of items to a cart to make things cost effective, or to have a chance at profitability. This is about volume, lots of repeat customers. – Sucharita Kodali, Forrester Research analyst
On the rivalry with Amazon, Kodali said that Brandless would have been taken aback if Jeff Bezos wanted to compete on product-basis. However, presently, resellers are selling some of the company’s popular items at heavy price rise on Amazon. For example, vegan blueberry muffin mixes priced at $3 on Brandless are being sold at $8.99 on Amazon.
Sharkey said that she wants to work with delivery services and vertical farms from SoftBank portfolio. She and SoftBank will be going through a joint venture in Asia, date yet undecided. Currently, she is advancing logistics and widening delivery range beyond the American lower 48.
Brandless now has 90 employees and has a unique plan to go for a year-end expansion that includes selling 400 products. These products involve a fall-themed cranberry-flavored set of items: lip balm, cookie mix, and lentil crisps.