Grove Collaborative Announces $15 Million PIPE Investment from Volition Capital

Volition Capital, a Boston-based growth equity firm, has made a $15 million PIPE (private investment in public equity) investment in Grove Collaborative Holdings.

Volition previously invested $10 million in Grove by purchasing Series A Convertible Preferred Stock in August 2023. This latest round brings its total investment in the company to $25 million.

The investment was led by Larry Cheng, managing partner and co-founder of Volition. Chen is also a member of Grove’s board of directors.

With a portion of this investment and its cash on hand, Grove plans to pay off the remaining $30 million of its outstanding term debt facility. The company has agreed to use at least $10 million of the proceeds for this purpose by November 30, 2024. Grove previously paid off $42 million of its term debt facility in July of this year. Grove’s remaining cash and cash equivalents as of June 30, pro forma for the $42 million July repayment, would be approximately $40.6 million. After full repayment of the term loan, Grove’s only remaining debt would be $7.5 million under its asset based loan facility.

PIPE Investment

In connection with the investment from Volition, Volition’s forfeiture and termination of all existing warrants to purchase, in the aggregate, 1,600,683 shares of Grove’s Class A Common Stock, and Volition’s agreement to modify certain terms of the Company’s existing Series A Convertible Preferred Stock, Grove issued Volition 15,000 shares of Grove’s Series A’ Convertible Preferred Stock. The Series A Convertible Preferred Stock is initially convertible into 7,760,761 shares of Grove’s Class A common stock based on an initial conversion price of $1.9328 per share, which represents a 45% premium to the 30-day trailing VWAP of Grove’s Class A common stock on the days preceding the signing of definitive documents for the financing, according to details released by Grove.

Cheng will continue to serve on the company’s board of directors.

“I’m thrilled to announce this $15 million investment from Volition Capital and, specifically, Mr. Cheng, a reputable investor and current member of our board of directors, reinforcing his confidence in Grove Collaborative’s strategy and mission,” said Jeff Yurcisin, CEO of Grove Collaborative. “This investment is designed to allow us to become term debt free, which is a key next step in our company’s turnaround—after most recently delivering four consecutive positive-adjusted EBITDA quarters while forecasting sequential revenue growth in the fourth quarter of this year. Our strategy to become the platform for conscientious consumers to purchase planet-friendly and wallet-friendly products is more relevant than ever and I’m excited to continue our focus on creating shareholder value.”

“This investment is driven by my belief that the Grove management team has done an excellent job executing on the fundamentals of the business. The company has made major strides in profitability and has been adjusted EBITDA positive for the preceding four consecutive quarters. With our investment and the planned pay off of the remainder of the term debt, the balance sheet will be stronger. And I believe the pieces are in place to enable a return to top line revenue growth in the coming quarters,” said Cheng. “All of this has been accomplished while substantially improving Grove’s offering to better and more consistently delight customers.”