Billion-dollar buyouts new 'gold standard' for e-commerce start-ups, Bonobos CEO says

Bonobos CEO on disrupting the retail model

Two and a half years after saying he would aim for a public offering, e-commerce entrepreneur Andy Dunn sees a new "gold standard" for companies like his: acquisition.

Dunn, the CEO of online men's clothing retailer Bonobos, referenced the success of Michael Dubin, founder of Dollar Shave Club. Dollar Shave Club was acquired by Unilever earlier this year for a reported $1 billion.

"I'm so grateful to [Dubin], because he really set the gold standard that you can actually build a business in this space that isn't just worth something for 10 percent of the business, or 20 percent of the business — which is what happens when you raise capital — but where the whole thing was worth $1 billion," Dunn told CNBC's "Squawk on the Street" on Monday. "So it's an exciting time in e-commerce."

Andy Dunn, CEO of Bonobos
Scott Eells | Bloomberg | Getty Images

While there's no indication that Bonobos is on the auction block just yet, Dunn's remarks come after a slew of e-commerce deals. Online retailers and Trunk Club were bought by traditional retailers this year, as IPOs become a less-common exit strategy for start-ups.

"The traditional retailers are seeing some softening, and I think that's because you're seeing more and more e-commerce and [mobile]-commerce taking share from traditional retail," Jeremy Liew, a partner at Lightspeed Venture Partners and Bonobos investor, told CNBC's "Squawk Alley" last week. "So I think we have a lot of room to run there."

But not every company cashes out by the billion like Dollar Shave Club or Jet. So-called unicorn start-ups like Gilt Groupe and One Kings Lane were reportedly acquired this year at a fraction of their peak venture-capital valuations.

Bonobos — a quest for better-fitting men's pants that has since expanded to floral shirts, flannel shirts and more — foresaw these kinds of challenges. In 2014, Dunn told Pando Daily that he didn't want to "take a step backward" just to raise more money, and that he hoped for an IPO.

This is the biggest time of year for us for gifting: Beauchamp

But while acquisitions seem rampant, IPOs have been scarce. U.S. IPO filings have fallen more than 47 percent from a year ago, according to Renaissance Capital.

Blue Nile, an online jeweler that caters to millennials, recently decided to go private, in part because it wanted to continue to evolve in the non-public environment, chairman, CEO and president Harvey Kanter told CNBC's "Power Lunch" on Monday. Beauty subscription service Birchbox, for instance, reportedly faced a venture capital crunch, partially due to pressures in the public market, the CEO said.

"It was challenging for a while when the entire retail industry has suffered a little bit," Katia Beauchamp, CEO and co-founder of Birchbox, told CNBC's "Squawk Alley" on Monday. "It's been tough in the actual public markets, and that absolutely impacts the private markets. But we're able to get our investors to support us and are on the other side."

But Beauchamp said no more layoffs are coming to her company this year. And Dunn said that Bonobos is now profitable and saw twice the foot traffic on Black Friday that he's seen historically. He expects Cyber Monday to be twice as big as Black Friday.

"We're optimistic that we're building a real business, not just a flash in the pan sales story and venture capital story in e-commerce," Dunn said. "With all of the attention on e-commerce, there are very few companies that have gotten out and proven they can make money."