Brandless, a San Francisco, Calif.-based startup with substantial operations in Minneapolis, plans to cut the majority of its staff and prepare to shut down operations.
Once valued at around $500 million after an investment from SoftBank, Brandless will dismiss about 70 people – nearly 90% of its employees and stop accepting online orders, according to the Financial Times. Its products will still be available at select CVS stores and about 10 employees will remain. The company is evaluating options for its future.
In a message on its site, the company cited a "fiercely competitive direct-to-consumer market" that was "unsustainable for our current business model" as its reason for ceasing operations.
Brandless had an office in Minneapolis led by Chief Merchant Rachael Vegas. She joined the company early on after working at Target for more than a decade. According to her LinkedIn profile, Vegas left Brandless in July 2019.
A spokesperson for Brandless did not answer Minne Inno's request for comment about the company's Minneapolis office.
Originally, the company's Twin Cities presence consisted solely of Vegas and four other employees working out of her home. In just over a year, the local operation outgrew Vegas' kitchen table, an office in Fueled Collective and another office in downtown Minneapolis.
Brandless had about 30 employees in Minneapolis at the end of 2018. At the time, the company was planning to move out of its office in the Butler Square building in favor of a larger location in the North Loop. It also had ambitions to continue growing its local team, which consisted of employees in core merchandising, merchandise planning and quality assurance.
"I'm proud of what we created at Brandless and the hard work and dedication of everyone on the team," CEO Evan Price said in a statement. "Brandless set a new standard in the wellness and sustainable products industry, and while we weren't able to compete competitively in today's DTC market, I'm confident the next great brands of tomorrow will be built from this experience."
Brandless originally offered generic, environmentally-conscious household goods for $3 apiece. The company later gave up on that model, adding other items and pricier CBD products. It ultimately failed in its attempt to increase the prices of its product, the Business Journal reports, and went through a round of layoffs in 2019. Shortly after, CEO and co-founder Tina Sharkey resigned.
The e-commerce company counted SoftBank among its investors. Two years ago, the Japanese conglomerate led a $240 million round of funding for Brandless. SoftBank initially gave $100 million to brandless as part of $200 million in committed funding but did not end up investing the remainder, according to the Financial Times.
Brandless is now the first SoftBank Vision Fund company to close, according to Protocol, which first reported the story.
