Bonobos founder Andy Dunn explains in an interview at Code Commerce rather candidly why Bonobos thought selling to Walmart was better than going public:
At a decade old, Bonobos was looking at three “really exciting” options to help fuel some of its growth, Dunn said.
One was to take a small, $15 million round of funding and stay independent, but without getting any liquidity for founders, employees or investors.
Another option could have been to sell a chunk of the company to a private equity group, which would have probably meant ceding control. Not fun.
A third option turned out to be the move Dunn chose: Selling to another company — in this case, Walmart.
This got liquidity for shareholders, even if it wasn’t at a billion dollar valuation. And it also fetched some potentially useful tools for future growth, such as the infrastructure Jet is building out to get shipments to consumers faster, and access to a wider range of customers than Bonobos had been able to attract itself.
Now, that does not sound either inspiring nor imaginative. Here is more:
“It’s a weird time to be a retail company,” Dunn said. “If you’re not Nike or Under Armour, or one of these really big vertical brands, or Chanel, or have tens of billions of dollars … it’s hard.” The struggle as a mid-sized player fed into his decision.
This perceived struggle more than anything may be the real reasoning behind the decision. If one sees one‘s market like that it certainly makes sense to go into a Walmart online holding and betting on the infrastructure and distribution Jet.com is hopefully building.
It just doesn‘t sound like coming from a position of strength. And in the grand scheme of online things neither Walmart and Jet.com come from a position of strength.