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Boxed to go public in $900M SPAC deal

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Online grocery retailer Boxed is going public via a $900 million SPAC deal. Boxed CEO Chieh Huang joins Yahoo Finance Live to discuss.

Video Transcript

[MUSIC PLAYING]

AKIKO FUJITA: Online grocery retailer Boxed is announcing it's going public through a merger with blank check firm Seven Oaks Acquisition Corp. That announcement today with a deal valued at $900 million brings in, or at least provides Boxed, with roughly $334 million in net cash proceeds. Let's bring in Chieh Huang, the CEO of Boxed. And Chieh, certainly a very exciting day for you.

I know you're joining us from New Jersey where it all started. But talk to me why you decided to go through a SPAC because this really comes at a time when there is more and more scrutiny on these mergers, especially coming from the SEC. Why did you decide to go forward in this way?

CHIEH HUANG: Yeah, absolutely. So two main reasons it could go. One is the quantum of capital that we can raise. So as you mentioned before, depending on the final vote, we'll get roughly, if all goes well, over $300 million through our balance sheet.

So that quantum of capital is very difficult to raise, given our market cap if we went the traditional IPO route. Second has been really being able to tell our story. So of course, most folks out there know us for our B2C business. But really, as we're releasing the data now, a big portion of our business is B2B. So servicing small-to-medium sized enterprises, fortune 500 companies all around the country.

That business got really, really hit last year because of COVID. And to be able to tell that story of what it looks like going forward has been really the reason why we chose SPAC. The other part of B2B and the other part of our story that we want to tell that we couldn't tell within S-1 was how we're beginning to sell the software that powers Boxed. And so all those reasons combined pushed us towards choosing the SPAC instrument.

ZACK GUZMAN: Yeah, I mean, we've been talking for years now. I mean, you've been on the show with us here at Yahoo Finance multiple times over this. You guys have been doing this for eight years. So to see an exit value here, valuation around $900 million is a lot in eight years time. But talk to me about that B2B side because we had discussed your partnerships in Asia there as a reason for acceleration of what you saw in growth ahead. So I mean, how big has it been for you? And what do you see in that next step as you lean into that side of the business?

CHIEH HUANG: Yeah, so on B2B here in the US, we do feel like we're about to enter one of the most prolific back-to-school, back-to-work periods in modern American history, perhaps even American history in general. And so servicing businesses here, both small and large with pantry snacks, with things that they need to power their business from consumables perspective is something we're really looking forward to.

Now, internationally, we're also not just selling snacks. Or we're not selling snacks internationally. We're selling the software.

And so partnering with folks like Aeon is going to be really huge for us. So in our forecast, you're going to see that we're forecasting a good amount of revenue. Even this first year in selling revenue, we're forecasting out eight figures of revenue this year. And we think it's going to be a compelling value for investors who see the future that e-commerce is not slowing down. And e-commerce enablers are certainly seeing a lot of tailwinds as we exit COVID.

AKIKO FUJITA: What kind of pickup have you seen in Asia? Obviously, that partnership with Aeon is certainly a big one. But as you look at potential growth prospects and the recovery that's happening in the region, what are you seeing on your front?

CHIEH HUANG: I'm seeing a lot of potential. Because if you think about it, we don't talk too much about even something like Southeast Asia here in the US. But if you combine something like Vietnam and in Indonesia, those two countries combined have more people than the US. And so those folks are digitally savvy. They're beginning to buy things online.

Of course, now, there's heavy lockdowns because of COVID. But as we begin to launch our projects there, you're going to see us really capitalize on those tailwinds.

AKIKO FUJITA: Chieh Huang, always good to talk to you. Boxed CEO joining us on the back of their big SPAC merger announcement.