In the 2010s, Wish ads were everywhere. Ads for the strangest and cheapest items were on every social media. They were inescapable. A cat face mask, a chicken helmet? A $10 drone, and stuff that’s much, much stranger. “Weird Wish ads” became its own subgenre on YouTube. Yet, the story behind the company might be even stranger. Billions in revenue, Facebook investments, and even a secret meeting with Jeff Bezos, it seemed Wish would be the next big thing. But their share price has fallen 99%, and has stayed there for years. What happened to Wish? I will tell you all this in this blog, so stay with me.
How Wish Chose Growth Over a Golden Exit:
Wish was a very strange platform. It was described as the “dollar store of the internet”, but it’s more complicated than that. The company’s actual name is “Context Logic,” and it was founded as far back as 2010. It was started by a former software engineer at Google, Peter Szulczewski, who helped build algorithms for Google Ads. You see, the original idea, and why Szulczewski got millions in VC funding, was the technology. After leaving Google, he spent 6 months coding software that could predict someone’s interests based on browsing behavior and then match a potential product. Keep in mind, this was in 2010, and this technology wasn’t nearly as prevalent as it is today.
After raising $1.7 million in funding, Szulczewski was offered $20 million from Facebook to integrate the algorithm into their own ad system, but turned it down. Investors were furious, with one evening storming into Szulczewski’s office and shouting at him. But he had bigger plans. He pivoted his company to “Wishwall.me,” and it wasn’t even an e-commerce site, just a Wishlist, which promised rewards, free items, and discounts. Users would just browse curated products you couldn’t even buy, and Wishlist them. It was essentially the Instagram of window shopping.
People just liked scrolling, and somehow Wishwall got a lot of users. Szulczewski realized he was onto something. He began cold emailing dozens of merchants, offering them a massive pool of buyers if they could cut the price by 10-20%. The most shocking part is that Wish wouldn’t take a commission. And to his surprise, many agreed. Wish quickly became one of the biggest marketplaces on earth, but was essentially a glorified middleman. The products came from low-cost manufacturers in China, and Wish handled none of the inventory or fulfillment. But still, why not take a cut?
They were introducing millions of customers to these products after all. Wish was on the typical tech start-up roadmap: Get as many customers as possible, chase growth, figure out profits later. Many do this to position themselves for an acquisition, so they can grow a company, spend a lot of investor funding, and they all get a big payout.
But not Wish, which gives us one of the most baffling decisions from Szulczewski. Wish was growing fast, and in 2016, he was invited to a secret meeting with Jeff Bezos at Amazon Headquarters. We don’t know what happened because he had to sign an NDA, and there were plenty of lawyers present, which paints a pretty clear intention: An acquisition. Szulczewski said that “there was an agenda” to the meeting.
With Wish’s amazing technology, they wanted in. It was rumored that the offer was $10 billion. For added context, Bezos was Szulczewski’s idol. This was the perfect opportunity, but, despite all that, something unexpected happened. Szulczewski turned down the offer. He told Bezos he had no intention of selling Wish. But Amazon wasn’t the only one ready to buy. The Chinese giant Alibaba was also interested and offered the same price: $10 billion. To make things even more interesting,
Wish was only valued by investors at $3 billion. This was a good offer, so why turn it down?
The Ad-Fueled Illusion:
Well, sometimes founders have a grander vision and think they can grow beyond the offer. Snapchat was offered $3 billion by Facebook, and while they didn’t grow as big, they have grown much bigger with a market cap of $15 billion, and are now profitable. So, what about Wish? According to an insider, “Szulczewski thought he could grow his start-up to at least $100 billion in gross sales, or one-quarter the revenue of Walmart”. If he could, Wish would be worth much more than $10 billion. Very ambitious, and to his credit, things began to take off very soon. Wish’s revenue grew and grew.
In 2018, it doubled to $1.9 billion, putting its valuation at $8.7, and was the most downloaded shopping app worldwide. Their user count was going up and up, and that year they passed 400 million, and became the third-biggest e-commerce marketplace in the US by sales. In fact, every year they were adding 100 million users.
In 2019, Szulczewski said to investors they “should expect an IPO in the next year or two”, and sure enough, the momentum continued. Wish raised another $1.1 billion in their IPO, pushing their total value to $14.1 billion. Wish was riding high. But pretty soon, that was about to change.
The Ad Trap:
Just like Wish gamed the ad system to flood your feed with junk, the news you see every day is shaped by similar algorithms, designed for engagement, not truth. This is a good time to talk about those strange Wish ads. 3-day 6-pack cream, a cat mask, a “USB-powered pregnancy test.” Ads for the weirdest products were everywhere. So, why?
This is what Wish was good at. The algorithms could match products to users based on their browsing behavior… but here’s where things get a little weird. “Browsing behavior” can mean a lot of things. So strange ads that you can’t help but stop and look at or even click on, which tells the algorithm that those were successful ads, and it pushes them even further. Wish’s ad campaign was optimized to drive traffic and clicks, not necessarily purchases. So why were these ads everywhere?
Wish was spending big, big money on digital ads. In fact, they were the largest ad spender on Facebook and Instagram, and one of the biggest on Google. Wish was growing very fast, but there was a big, big problem underpinning all of this growth.
Wish wasn’t profitable. You might think, “Sure, they were chasing growth”. But there’s unprofitable, and then there’s Wish. Their profit margins were -100%! -100! For every $1 earned, they spent $2! The more their revenue went up, the further down their earnings went. They had billions in funding, but pretty soon, they needed to figure out how to make a return.
Scams, Zero Loyalty, and the Temu Juggernaut:
But time was about to run out, with what came next. While everyone was stuck inside, retail and physical businesses were dying, but online shopping exploded. But isn’t that good for Wish? Well, not exactly. You see, digital ad spend quickly went up. More and more companies began pouring money into online advertising, as that was the only way to advertise to new customers. Competitors were pouring into Wish’s marketing strategy, or rather their only strategy.
On Google Ads, when more companies are bidding for keywords, the price of that keyword goes up. Now imagine that on a global scale. Wish’s unique and frankly only strategy was falling apart. But, they were already unprofitable when ad spend was good. Now, the ROAS was even worse. It was the perfect storm.
In 2020, Wish had reached a revenue peak of $2.5 billion, but that marked their biggest loss: over $600 million. Then, for the very first time, Wish’s sales began to drop. By $500 million in 2021, then by another $1.5 billion in 2022. It’s very funny if you compare their revenue and profit, because of their negative margins, it looks as though Wish makes more money the less revenue they make. But to make matters worse, there was another problem.
People weren’t loyal to Wish. They were loyal to the deals and absurd prices. It’s hard to build loyalty on price compared to, say, a unique experience, like Amazon’s incredible fulfillment and fast delivery. Customers will just leave when they find something cheaper, like Temu. And if they don’t, they will because of the horrendous customer experience.
When I said they prioritized growth over everything, I mean everything. It probably won’t surprise you to hear that Wish was full of scams. Smart TVs for $1, gaming computers for $1.3, scam stores were rampant on Wish. One person who ordered a $70 tablet received a small stand and a note in broken English saying it was “coming”. Of course, it never did. Many of these scams sold real products, brought in lots of 5-star reviews, then swapped out the same product for a terrible, cheap replica, in order to scam customers and make a return.
But this is where things take a darker turn. One of them was called “bestdeal9”, which was also created by Wish. They had created this fake store to track whether customers would complain if their orders never arrived. Employees working on the project pushed executives to remove the store, calling it “unethical and illegal”, but it remained active for months, and over 213,000 people made purchases from the store. But that’s just one tiny example.
To make matters worse, unlike Amazon, Wish had virtually zero customer support. So, if you got scammed, you needed to wait over 3 months before you could appeal for a refund. That might be expected from some shady marketplace, but Wish was a multi-billion-dollar company. Wish had zero concern for customers.
The $173 Million Aftermath:
These scam stores were everywhere, and after a while, people were done shopping on Wish. Wish began to finally introduce some accountability. In 2022, the company said it had “started a fresh organizational chapter.” Some new executives had just joined from Google and Shutterfly, and began to make some changes. An app redesign was underway, and they tried to improve the response time of customer service. But it was too little too late. People have moved on. The brand was already tarnished, and many customers had moved elsewhere.
In September 2022, a competitor had appeared in Wish’s territory: Temu. They were a new company, but by no means a small player. They were backed by Pinduoduo, which has a market cap of $170 billion. Temu had much, much more money, and just 5 months after launching, Temu ran two ads during the 2023 Super Bowl. This made Temu the youngest brand to ever run a Super Bowl ad. It was Wish, but better. More legit, more resources, and direct from suppliers. Wish, on the other hand, had been losing money for over a decade and was beginning to run out. Hundreds of employees were being laid off, and revenue was in freefall.
ContextLogic’s share price had fallen by over 99%. Their monthly active users had fallen from over 100 million in 2020 to just 12 million. That year, they only saw 5 million new signups, compared to the annual hundred million from a few years ago. Around this time, Peter Szulczewski stepped down as CEO. Investors were getting tired. And soon came the inevitable.
In early 2024, ContextLogic sold Wish for $173 Million to the Southeast Asian ecommerce company “Qoo10”. Pitiful compared to their original $10 billion offer, but it was the right time to sell, or rather, their last chance. The acquisition was at $6.50 per share, a 44% premium, which, in their circumstance, was pretty good. With Temu growing, the buyout offers would only get worse and worse.
I should also note that Qoo10 would end up bankrupt by the end of 2024. I’m sure Szulczewski wished he had taken the $10 billion from Bezos or Alibaba. Wish hadn’t scaled for sustainable or long-term success, just growth by any means necessary. Growth without loyalty or profits. But it was “Wish” that was sold, not ContextLogic. The company was still independent, so what happened to them?
Well, Wish was a money sink, and when it went, so did many of their liabilities. ContextLogic is a very different company. Much smaller, and no longer an e-commerce company.
In the first quarter of 2025, ContextLogic reported a NetLoss of $4 million. Not good, but much better than the $59 million they lost the same time last year. It seems they’re still trying to figure out what to do. They have $2.7 billion of Net Operating Loss carryforwards, which means they don’t need to pay taxes on future profits for a long, long time, that is, if they ever make money again.
The board said they are looking for a “financial sponsor” to help the company realize the value of its tax assets, and if they can’t return all capital to shareholders. If I were to make a bet, it’d be on the latter.
Szulczewski now owns a new venture called “MAGI Inc”, but it seems he’s staying away from the public eye and ecommerce altogether.
Conclusion:
Wish’s story is a masterclass in how a brilliant algorithm and relentless growth can build a paper empire with no foundation. By rejecting a $10 billion lifeline to chase a fantasy of becoming the next Walmart, Wish instead became a case study in unsustainability, drowning in its own ad spend, corroded by scams, and ultimately rendered obsolete. It serves as a stark reminder that in business, a vision without a path to profit is just a very expensive wish.
FAQs:
1. What was Wish’s original, valuable idea?
A: It was a predictive algorithm that could match products to users based on browsing behavior—a novel concept in 2010 that attracted major VC and even Facebook’s interest.
2. Why did Wish’s founder turn down a $10 billion offer from Amazon?
A: Peter Szulczewski believed he could grow Wish into a $100 billion sales giant, a quarter of Walmart’s size, making the $10B buyout seem small in comparison.
3. How could Wish lose money on every sale?
A: Their core strategy was to spend $2 on digital ads for every $1 in revenue, chasing user growth at a staggering -100% profit margin with no plan for sustainability.
4. What was the “ad trap” that doomed Wish?
A: Their entire business depended on cheap online ads; when the pandemic drove more competitors online, ad costs soared, vaporizing their already-negative business model.
5. Did Wish really run a fake store to scam its own customers?
A: Yes—an internal project called “bestdeal9” sold fake products to over 213,000 users to test complaint rates, which employees called “unethical and illegal.”
6. What ultimately happened to the company?
A: After users fled to Temu, its value collapsed, and the hollowed-out “Wish” brand was sold for just $173 million—a pitiful fraction of the $10 billion it once refused.
