Acquired Episode 39: Whole Foods Market

Acquired

Ben Gilbert and David Rosenthal

Venturecapital, Ma, Investing, Acquisitions, Startups, Vc, Investment, Business, Technology

4.8 • 2.9K Ratings

🗓️ 21 June 2017

⏱️ 76 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

Ben and David are once again live on the scene, this time covering the biggest disruption in grocery since… well, sliced bread: Amazon’s $13.7B purchase of Whole Foods Market. We place this deal in context by diving deep into the long, intertwining history of grocery, tech and Amazon, from the infamous dotcom flameout Webvan (domain name now owned by Amazon) to its much more successful progeny Kiva Systems (acquired by Amazon in 2012) to current Silicon Valley unicorn Instacart (founded by former Amazon logistics engineer Apoorva Mehta). One thing is clear: for Amazon and Jeff Bezos, realizing the longterm vision of the Everything Store truly means building the everything store.

Sponsors:
Vanta: https://bit.ly/acquiredvanta

Statsig: bit.ly/statsigacquired
Modern Treasury: https://bit.ly/acquiredmoderntreasury

Topics covered include:

The origins of Whole Foods Market as “Saferway” in the late 70’s Austin, TX hippie scene, founded by CEO John Mackey (“the Steve Jobs of grocery stores”) and his then-girlfriend Renee Lawson Hardy
Whole Foods’ expansion through acquisition throughout the 80’s and 90’s
The company’s recent struggles with competition, leading to sales declines and attracting activist shareholder interest from Jana Partners
Amazon’s acquisition of the company on June 16, 2017 for $13.7 billion, a 27 percent premium to the stock's previous day closing price
In depth history and analysis of the four keys to understanding this deal: Webvan, Kiva Systems, AmazonFresh and Instacart

Followups:

Walmart/Jet buys Bonobos for $310M

The Carve Out:

Ben: Mark Zuckerberg’s 2005 CS50 guest lecture
David: Exponent on Podcasting and Centralization

Transcript

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0:00.0	Yep, yep, completely agreed.
0:03.0	Podcasting is the new groceries.
0:07.0	Yeah, well, good thing we're here on the scene. And
0:26.4	Welcome back to episode 39 of Acquired, the podcast about technology acquisitions and IPOs. I'm Ben Gilbert. I'm David Rosenthal and we are your hosts. Today we are coming in hot with the just announced Amazon acquisition of Whole Foods
0:36.2	for 13.7 billion dollars all in cash.
0:40.6	Are we ever?
0:41.6	We are not planning on doing an episode today, but David and I woke up, saw the news and absolutely could not resist.
0:48.0	We live for this. So here P. S. T.
0:53.8	The day the acquisition was announced this morning.
0:56.1	And hot takes flying all over the internet.
0:58.8	David and I do not purport to have any of the answers, but we do have hot takes of our own.
1:04.0	So in true acquired fashion, we will probably be wildly speculative.
1:08.0	We have no idea what they're going to do with this acquisition.
1:10.7	And we certainly cannot give it a grade that we feel very confident about but is
1:16.6	going to be real fun to talk about. Before we dive in now important
1:19.8	announcement so Ben's birthday is coming up this week and if you want to
1:26.6	get him in present like me you should leave acquired a review on Apple Podcast.
1:33.0	See what we did there.
1:35.0	No, seriously.
1:37.0	David gets some of my birthday present too, apparently.
1:39.0	I'll rate you a review then.
1:42.0	But no, seriously, we have some acquired is growing a lot and we have
	...

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