Investment firm injects $15M into Grove Collaborative, using funds to repay existing term debt
Grove Collaborative, the sustainable home essentials company, has been making strides in its financial turnaround efforts, thanks to an investment from Volition Capital. The investment, which was made in 2023, has helped Grove pay off a significant portion of its outstanding debt and focus on profitability.
According to Volition Managing Partner and co-founder Larry Cheng, Grove was not managed well in the years prior to their initial investment. The company was experiencing EBITDA losses and difficulties in servicing term debt. However, since the investment, Grove has been prioritizing "profitability and balance sheet strength over revenue growth."
Volition Capital paid a little over $1.90 per share of Class A Common Stock, which is nearly 40% higher than the share price on the date of closing. The investment was used to pay off $30 million of Grove's outstanding term debt facility, with at least $10 million used by Nov. 30.
The total investment from Volition now stands at $25 million, following a $10 million investment about a year ago. The investment has allowed Grove to amend its loan facility, extending the maturity to April 2028 and increasing availability, which improves financial flexibility and liquidity.
In terms of financial performance, Grove reported a net loss of $3.6 million in Q2 2025, significantly reduced from a $10.1 million loss in the same quarter of the previous year. Adjusted EBITDA remained slightly negative at -$0.9 million, a decline compared to a positive $1.1 million a year earlier, indicating ongoing challenges in profitability. However, revenue was $44 million for Q2 2025, down 15.5% year-over-year but slightly up 1.1% from the prior quarter, signaling early signs of recovery after prior declines.
Grove also achieved positive operating cash flow of $1 million and total cash flow of $0.4 million, suggesting progress in liquidity and cash management. DTC net revenue per order rose nearly 5% in the most recent quarter, a positive sign for the company's sales.
However, the company's most recent quarter saw a decline in net revenue, DTC active customers, and DTC orders. Despite this, the company was able to expand its gross margin, narrow its net loss, and make a $42 million payment towards term debt.
Grove's CEO, Amazon veteran Jeff Yurcisin, has been leading the company's efforts to overhaul its subscription model, switch from a custom website to Shopify, and expand its wholesale operation. Under Yurcisin's leadership, Grove has continued to focus on its sustainability pitch to customers while working towards profitability.
In addition to Volition's investment, Grove received a $15 million private investment in public equity. The company is continuing to focus on structural improvements and expects to return to year-over-year revenue growth by Q4 2025, marking a key milestone in their transformation efforts.
Overall, Grove Collaborative is advancing toward consistent profitability and cash flow generation but still faces headwinds in revenue growth and EBITDA profitability as of Q2 2025. Strategic debt refinancing and operational adjustments have played important roles in their turnaround since the Volition Capital investment.
- To enhance its business operations and focus on profitability, Grove Collaborative has been leveraging artificial intelligence and machine learning to streamline labor processes, aiming to reduce costs and increase efficiency.
- Grove Collaborative, with the aid of Volition Capital's investment, has been directing funds towards business expansion, particularly exploring opportunities in the finance sector for possible investing partnerships to boost growth and revenue.
- In line with Grove Collaborative's transformation efforts, the company has scrutinized its financial structure and is contemplating the implementation of AI-driven risk management models to optimize business and finance processes, ensuring a healthier balance sheet and contributing to overall sustainability.
