Brandless, an online store backed by SoftBank Group that sold household goods for $3 each, is shutting down.

What Happened

Brandless, based out of San Francisco, will wind down operations. The company is the first SoftBank Vision Fund-backed startup that has shut shop as it lays off 70 people. It has been reported that 10 employees would stay on board to process any remaining orders and “evaluate any acquisition offers.”

The direct-to-consumer company, which began operations in 2017, released a statement on its website: “While the Brandless team set a new bar for the types of products consumers deserve and at prices they expect, the fiercely competitive direct-to-consumer market has proven unsustainable for our current business model.”

Why It Matters

Brandless was funded by SoftBank’s $100 billion vision fund to the tune of $240 million. TechCrunch, citing a source close to the company, revealed that less than half of that amount actually made it to the company. The fund has backed or purchased numerous startups like Slack, Uber, Zume, Wag, and WeWork.

Former Brandless CEO Tina Sharkey in 2018

SoftBank has invested over $14 billion into WeWork, a co-working space startup whose IPO failed. The startup suffered from disastrous leadership of its former CEO and co-founder Adam Neumann, who engaged in questionable practices such as charging the company $6 million for the “We” trademark and borrowing from the company at little to no interest.

SoftBank CEO Masayoshi Son’s judgment was questioned in the past, and last October apologized for his investing track record. “I include myself when I say it is not the time for Japanese entrepreneurs to be making excuses,” he said.

Co-founded by Tina Sharkey and Ido Leffler in 2017, “Brandless offered everything from beauty and hair products to grocery staples, and kitchen gadgets for $3 each, eliminating markup for distribution and marketing in its direct-to-consumer model,” according to bizwomen. Sharkey stepped down as CEO in March 2019, becoming co-chair of the board of directors. Two months later, the former COO of Walmart.com took the helm.

This story originally appeared on Benzinga.

© 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

Photo by Kimberly White/Getty Images for TechCrunch

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