A case study in why timing matters more than opportunity in consumer packaged goods
The press release reads like a victory lap:
“Brandless Raises $240 Million Series B Led by SoftBank Vision Fund.”
For co-founder Tina Sharkey and her team, it was a dream moment. At a rumored $500 million valuation, Brandless wasn’t just another startup; it was one of the most valuable CPG disruptors in history.
Eighteen months later, they shut down.
They didn’t die from a lack of demand. Or bad branding. Or weak leadership.
They died from success or at least the version of success they were forced to chase.
The Perfect Pitch with a Flawed Plan
Brandless launched in July 2017 with a deceptively simple proposition: high-quality consumer packaged goods at a universal $3 price point, sold direct-to-consumer without the "brand tax" of traditional CPG marketing. Co-founded by Tina Sharkey (former AOL and BabyCenter executive) and serial entrepreneur Ido Leffler, the company positioned itself as the anti-brand brand—a millennial-friendly alternative to P&G's empire.
The concept resonated immediately. By launch, they had already raised $50 million in venture funding before selling a single product. The pitch was intoxicating: What if you could build the next Procter & Gamble, but entirely online, with transparent pricing and sustainable practices?
The founders are impressive. CEO and Co-Founder Sharkey was a former executive at BabyCenter and AOL and had previously been a co-founder of iVillage. Co-Founder Ido Leffler was a serial entrepreneur, having co-founded the SOMA water pitcher and Yes To Inc. The media loved the story, investors saw massive potential, and early customers embraced the brand's wellness-focused, toxin-free approach.
But the numbers told a different story.
When Funding Becomes a Cage
One year after launch, in 2018, Brandless raised a massive $240 million Series C round from SoftBank’s Vision Fund, with a rumored valuation of $500 million.
From the outside, it looked like momentum. The media hype, the clean branding, the founders’ pedigree, it all painted the picture of a company ready to scale. And with 300 SKUs, all priced at $3, it made sense to think more capital could help them reach more customers, faster.
But this wasn’t just about money. It was about expectations.
SoftBank didn’t invest $240 million to build a thoughtful, sustainable CPG brand. They were betting on exponential growth on a billion-dollar exit that could justify a half-billion-dollar valuation. The problem? Brandless wasn’t a software company. It was a retail business selling physical goods, constrained by the very real costs of manufacturing, packaging, inventory, shipping, and support.
This is where the math broke.
Unlike a SaaS platform, where scale drives margin expansion, every unit Brandless sold carried hard costs. You don’t ship more product without spending more money. Yet they were valued like a tech company—fast, frictionless, infinitely scalable. It was a classic mismatch between business model and funding logic.
Let’s look at the numbers:
Average Order Value (AOV): $34
Free Shipping Threshold: $39
Price per SKU: $3
Implied Items per Order: ~11
Gross Margin (industry est.): ~30–35% on average
Customer Acquisition Cost (CAC): Rising, estimated $20–30+ per customer
At $3 per product, even an 11-item basket barely cleared $34. That left razor-thin margins to cover shipping, fulfillment, customer service, and especially marketing. And with only ~20% of customers returning for a second purchase, Brandless couldn’t rely on LTV to offset high CACs.
The numbers were upside down. The more they sold, the more it cost them.
This wasn’t a scale problem. It was a model problem. One that should’ve been solved or at least understood before scaling aggressively with hundreds of millions in funding.
In the end, Brandless wasn’t killed by a lack of demand. It was killed by the pressure to grow faster than its unit economics could support.
The Death Spiral of Low Margins and High Expectations
For a business model that depended on repeat purchases to amortize acquisition costs, these retention numbers were catastrophic.
Meanwhile, the pressure to grow intensified. Signs of serious trouble first emerged as far back as early 2019 when Tina Sharkey stepped down as CEO, leaving the board of directors altogether later in the year. Her replacement, John Rittenhouse (former COO of Walmart), lasted only six months before stepping down in late 2019.
The company began making increasingly desperate moves to improve unit economics. They eliminated food products entirely, the very category that had made them famous. At the time food products were discontinued, CEO John Rittenhouse told Forbes, "The average order value today needs to move from $48 to probably $70 or $80."
Next came a pivot to high-margin products that completely contradicted their original positioning. They launched expensive CBD products priced at $60+ and introduced a $600 Vitamix competitor. Going from selling products under $10 to selling products in the $60+ range is a massive departure, and as expected, the move produced some backlash.
The Brand Becomes the Liability
Brandless’s name, once its biggest branding asset, quickly became a liability. While the idea was to eliminate the “brand tax,” consumers interpreted “Brandless” as generic. That perception put them in direct competition with private label giants like Amazon, Target, Costco, and Walmart retailers with far better pricing power, distribution, and scale.
The timing made things worse. Amazon acquired Whole Foods in 2017, just a month before Brandless launched, signaling a major expansion into private label. Target followed by investing $2 billion into its own store-brand push, launching products at $2, undercutting Brandless’s $3 price point by 33%.
The result: a brand meant to stand out ended up getting priced and perceived like every store brand it was trying to disrupt.
When Retail Math Meets Silicon Valley Expectations
Brandless's failure illuminates a critical disconnect in how the venture capital world approaches CPG companies. The expectations that make sense for pure software companies, exponential growth, massive scalability, and winner-take-all market dynamics, don't translate to businesses selling physical products.
Peer competitors to Brandless, who've raised far less money, including Thrive Market and Public Goods, are still in operation. The difference? Companies like Thrive Market built sustainable unit economics from the beginning with a $60 annual membership fee that helped offset customer acquisition costs. They grew more slowly but more sustainably.
The pattern extends beyond Brandless. Fellow DTC brands like Casper saw their valuations collapse when public markets demanded actual profitability. Away faced similar challenges with unsustainable unit economics masked by venture funding. The common thread: raising too much money too quickly creates expectations that retail businesses simply cannot meet.
You Don’t Get to Fail Fast in Retail
Brandless didn’t need $300 million. They needed time—time to find their loyal customer, time to tune their operations, and time to verify real product–market fit before scaling.
The lesson?
In retail, success that comes too fast can be just as fatal as failure.VC money can buy momentum, but it can also cost you your vision. Founders need to know when to say no—even when it’s hard, especially when it’s hard.
Because long-term sustainability isn’t built on speed.
It’s built on focus, patience, and intentional growth.
And you don’t have to be the next Google or Facebook to be a success.
Success is what you define it to be—for your company, your pace, your purpose.