Grove Collaborative Holdings, Inc. , a leading sustainable consumer products company and certified B Corp™, today announced that it has entered into a new Loan and Security Agreement (the “Loan Agreement”) providing for a four-year $72.0 million term loan.
“This transaction aligns our capital structure to our ongoing improvements to become profitable and to our internal operating timelines and gives us the financial backing to weather an extended challenge in market sentiment.”
With this transaction, Grove also welcomes two capital partners with deep experience in consumer, disruptive commerce, and ESG to its capitalization table, Structural Capital (“Structural”) and Avenue Sustainable Solutions Fund, L.P. (“Avenue”).
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The new funds will be used to refinance existing debt and to fund ongoing business operations as Grove continues to push to profitability. The term loan bears an annual interest at the greater of 15% or prime plus 7.5%, payable monthly. The principal repayment period commences in July 2025 and the term loan matures in December 2026.
“We are pleased to announce this agreement, which provides greater financial flexibility to our cash and liquidity position,” said Stuart Landesberg, Co-Founder and CEO of Grove. “This transaction better positions Grove for long-term success, enabling us to execute against our strategic value creation plan with the goal of achieving profitability in 2024. We are thrilled to have new partners, Structural and Avenue, who deeply understand our business and our mission to drive the consumer products industry to be a positive force for human and environmental health.”
”We are excited to partner with Grove by providing a compelling capital solution. Grove is an innovative leader in the consumer products industry and we look forward to supporting the Company’s management team in advancing their vision,” stated Kai Tse, Co-Founder and Managing Partner of Structural Capital.
“This transaction, executed on fair terms in a challenging market, speaks to the financial profile of the Company and the depth of our partnership with Structural and Avenue’s ESG-oriented Sustainable Solutions Fund,” said Sergio Cervantes, CFO of Grove. “This transaction aligns our capital structure to our ongoing improvements to become profitable and to our internal operating timelines and gives us the financial backing to weather an extended challenge in market sentiment.”
Loan and Security Agreement Details
The Loan Agreement replaces Grove’s existing credit facilities by and among (i) Grove and Silicon Valley Bank dated as of July 29, 2020 and (ii) Grove, Silicon Valley Bank, as administrative agent and collateral agent thereunder and the lenders party thereto, dated as of July 29, 2020.
In connection with the Loan Agreement, the Company entered into two Security Issuance Agreements (the “Issuance Agreements”), one with Structural Capital Investments III, LP and certain of its affiliates (the “Structural Investors”) and one with Avenue.
Pursuant to the Issuance Agreements, among other things, on the Closing Date (as defined therein) (i) the Company issued to the Structural Investors an aggregate of 3,437,500 shares of the Company’s Class A Common Stock, par value $0.0001 per share (“Class A Common Stock”), and (ii) the Company issued to Avenue 1,512,500 shares of Class A Common Stock. In addition, the Company may be required to issue additional shares of Class A Common Stock to the Structural Investors and Avenue if there are outstanding obligations under the Loan Agreement on the thirty-month anniversary of the Closing Date, in accordance with the terms of the Issuance Agreements.
Union Square Advisors LLC acted as exclusive financial advisor to Grove in connection with the Loan Agreement.
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