FabFitFun looks to ‘plant a flag’ in B-to-B services space with acquisition of packaging startup Boox

Daniel Broukhim told Modern Retail in an interview that the Boox acquisition, which closed this month for an undisclosed amount, is part of a bigger strategy to offer more B-to-B services. While its FabFitFun boxes can help up-and-coming brands reach a bigger audience, he said the company’s next chapter includes expanded services to help grow online DTC brands.

“We want to become a one-stop shop for brands,” he said. “Fulfillment has been an expansion strategy, and we think the next logical stop on that journey is packaging.”

As more DTC companies struggle with profitability and shifting consumer behavior, expanding into new areas is one way to diversify revenue. FabFitFun’s segue into brand operations is something of a rare move, but it could be a big opportunity based on the company’s existing relationships and DTC brands’ appetite for experience partners.

FabFitFun doesn’t share revenue, but the 15-year-old company has at least 2 million subscribers and has said that it’s profitable. Boox is at least the second acquisition FabFitFun has made in the past year, after acquiring Petco’s PupBox in April 2024. And it also has about half a dozen consumer brands, like blanket company Unhide that it co-launched with Ellen DeGeneres in 2019 and the lifestyle brand Summer + Rose that’s often featured in its boxes. Beyond fulfillment services, it also has an investment arm called FabFitFund that it has used as an accelerator for both owned brands like Unhide and others that it has invested in, like Byte oral care.

Brad Jashinsky, director analyst at Gartner, said many companies in this moment are looking for ways to drive more revenue with adjacent categories or services. That’s potentially because tariffs are threatening their profits. Or, it’s because of changing cultural and shopper trends stemming from AI use. But oftentimes, companies looking to launch adjacent services make more of a consumer-facing pivot, rather than one focused on backend services, which is what FabFitFun is doing.

Jashinsky did point out, however, that one of the most prominent e-commerce tech success stories, Shopify, was born out of a snowboard retailer.

“It’s a little different because it was a VC-backed business and it was an earlier pivot, but we do see a lot of these technology or infrastructure providers that start from a different business,” he said. “They encounter a need along the way and then pivot into a B-to-B selling point.”

Mainstreaming Boox’s reusable packaging options

Matt Semmelhack, founder and CEO at Boox, said Broukhim and his co-founder brother Michael Broukhim were early investors in Boox. The company launched in 2019 and raised $9.25 million in its Series A in 2021. It specializes in customized, branded packaging that is shipped back to Boox to be reused, and it has worked with companies like Goop, Cocokind, Guess and Sephora.

Semmelhack reached out to the Broukhims earlier this year when discussing Boox’s next fundraising round. But it quickly turned into a conversation around a “mutually beneficial” acquisition. Unbeknownst to Semmelhack, FabFitFun had been planning to expand its B-to-B service offerings, while Boox was contemplating developing more types of shipping products as well as sourcing and procurement for sustainable versions of products like bottles and sprays pumps. He said it made further sense given the types of brands both companies work with. Boox brings along more than 100 brand clients.

“Several of Boox’s clients have either been featured in the seasonal box, done partnerships or promotions, or grown alongside FabFitFun,” he said. “The overlap is strong, and the Venn diagram of our clients and theirs is almost two circles on top of each other.” There are also examples of Boox clients, like Goop, which FabFitFun has been in talks with for a long time but has not yet included in a box.

From a business perspective, some of Boox’s team will stay onboard, while some roles were eliminated for redundancy. This helps Boox on its own path to profitability, Semmelhack said, due to taking advantage of FabFitFun’s existing infrastructure and back office.

More B-to-B services from FabFitFun

Once integrated into FabFitFun, Boox will continue operating with its signature product and introduce it to more brands in the FabFitFun network. But Semmelhack said the bigger goal is to come up with new forms of sustainable packaging that may suit more needs, especially for startup brands that can’t afford the signature Boox products or are looking for something that doesn’t involve customers having to send it back.

Broukhim said the company is looking into it, when asked if FabFitFun will begin using Boox for its boxes or its owned brands. “We’ve gradually moved in a more sustainable direction as our infrastructure has allowed. It’s definitely a lot of work to make those leaps, but I think every brand aspires to be more sustainable,” he said. “I don’t see that trend going away, as it’s good to do something that has a positive impact on the world while also building your business.”

From a consumer lens, the trend isn’t going away. About 53% of Gen-Z consumers are planning to buy more from companies focused on sustainability and green products in the coming year, according to the 2024 Gartner Consumer Values and Lifestyle Survey. But, as far as the potential for brands to utilize Boox, Gartner’s Jashinsky said brands may be inclined to associate with FabFitFun’s services because they know it understands the needs of DTC businesses based on its own experiences.

“An infrastructure company that has employees in a seasoned team that has experience selling products is a great way to be able to connect,” he said. “Someone who’s only done fulfillment may not understand the ins and outs of DTC retail, and how important it is not just to move things in a timely way, but also to understand the full customer experience as a DTC retailer.”

Broukhim from FabFitFun said the fulfillment B-to-B services offered by FabFitFun are powered by the same technology that is used for its seasonal boxes. He said it has focused on shipping high volumes in a short amount of time, aligning nicely with drop culture or big launches. But beyond fulfillment and packaging, FabFitFun is experimenting with product development, marketing and trade financing services for other brands, Broukhim said.

“Part of this announcement is to plant a flag in the B-to-B space and let everyone know that this is what FabFitFun does,” Broukhim said. “The play with the reusable Boox packaging and the circular economy is longer-term as we keep building out B-to-B offerings.”