Exclusive: The CFO of Wholesale Grocery Startup Boxed Is Out Amid Acquisition Rumors

It has been reported for weeks that wholesale grocer Boxed is exploring an acquisition. Now CFO Naeem Ishaq is leaving the company. An internal email announcing his departure was sent out by Boxed’s leadership around 11 a.m. today, Fast Company has learned.

“Naeem is a world-class financial talent,” Boxed CEO Chieh Huang said in a statement. “Over the last two years, he has been indispensable in helping build and grow Boxed to what it is today. We will miss his energy, focus, and enthusiasm for our company. Perhaps his greatest legacy is building a well-versed finance team that will continue to focus on evolving the Boxed platform.”

The news comes after weeks of speculation that Boxed might be purchased by one of several major players currently battling over the future of grocery shopping. In January, grocery giant Kroger explored an acquisition of Boxed for $400 million, according to Bloomberg, but Boxed rejected that offer. Boxed has since had discussions with Amazon and Alibaba, according to the New York Post.  Costco also mulled a possible acquisition, according to a source with knowledge of the matter who spoke with Fast Company.

After rejecting Kroger’s bid, Boxed has decided to continue the fundraising efforts it began last year.  CEO Chieh Huang recently expressed a desire to take the company public.

Activity in the grocery industry is at a fever pitch as more consumers head online to buy food. Forrester Research notes that the online grocery market’s compound annual growth rate has increased 18% over the last five years. When it comes to grocery shopping online, most consumers are using the websites of major retailers like Target, Walmart, and Amazon, Forrester’s research shows.

As e-commerce spending trends upward, digital brands are looking for opportunities to expand their presence into traditional, brick-and-mortar retail businesses. In the last two years, Walmart bought Jet.com, Amazon acquired Whole Foods, Albertson’s picked up meal-kit company Plated, and Target paid $550 million for on-demand delivery startup Shipt. Meanwhile, grocery delivery service Instacart has inked deals with a whole slate of major retailers including Costco, Kroger, Albertsons, Publix, and Ahold Delhaize.

Boxed, with its fat bundles of toilet paper and 24 packs of Le Croix, could be an interesting acquisition for a brand looking to expand into bulk purchasing and perhaps more directly compete with Costco, which currently uses Instacart for its delivery services. Boxed also has a growing offering for enterprise customers. Delivering bulk goods to offices represents, for Boxed, 50% of all new business and 25% of the company’s overall business.

Ishaq originally joined the company in June 2016. He came from Square, where he served as head of finance, strategy, and risk. He is the third executive to leave Boxed in recent months. The company’s head of its business-to- business division, Behzad Soltani, left in February and its executive in charge of merchandising, Heather Mayo, left in September.

(Editor’s note: the writer of this story is married to someone who used to work for Boxed)