Thrasio, an e-commerce roll-up company, is raising a new round of capital. It has secured over $100m in funding, including $75 million in Series B Preferred equity and $35m in additional debt capacity.
Founded in 2018, Thrasio works with small business owners who sell essential everyday products through Amazon’s FBA program, which ships their goods to customers directly from Amazon warehouses. The company pays these sellers upwards of $1 million and then takes over operations.
Investing in Aggregators
Thrasio 750m serieslundentechcrunch recently raised a $100m round of funding, an extension to its Series C round. It was just the latest in a string of cash injections, including a $500m debt financing round in January and a $260m round last July.
Investor money has been pouring into the online aggregator market during the pandemic as it has pushed millions of consumers to shop online more often. Razor Group, Boston’s Perch, Luxembourg-based factory 14, New York-based Elevate Brands and Berlin-based SellerX have all raised huge swaths of venture capital over the past year.
Aggregator companies buy up brands that sell anything from straws to champagne flutes, boosting sales with their technology, marketing and logistics know-how. They also provide an exit for the merchants themselves, who may otherwise not have the capacity to sell their products.
Aggregators vs. Direct Sellers
One of the most popular ways for brands to grow their revenue is by selling their products through e-commerce channels. However, the proliferation of these platforms has led to a host of newcomers vying for your hard-earned dollars.
One company that stands out from the crowd is Thrasio, which specializes in acquiring, onboarding, and optimizing Amazon third-party private label (PLL) businesses. With over 100 brands and 15,000 items in its portfolio, Thrasio is quickly becoming a major force to be reckoned with.
The company recently secured $100 million in fresh capital and a big name CFO in retail whiz Bill Wafford. The Thrasio symphony is an impressive undertaking, combining a highly sophisticated data analytics engine with the latest and greatest e-commerce technologies in the hopes of delivering a profitable and consumer-centric experience. The company also has a well-designed user experience that sets it apart from its peers, and has a slick mobile app for customers to manage all their purchases in one place.
Aggregators’ Business Model
Despite the rise of the aggregator industry, there’s no question that it’s still relatively young. That’s why there’s no shortage of companies raising funding rounds in the space.
One example is Thrasio, which raised a $100 million round this year. The company, which claims to be the fastest-profitable unicorn in history, offers FBA merchants a seamless exit and helps turn their brands into world-leading consumer brands.
Its portfolio of over 200 brands is diversified across categories, including home and personal care, fashion, technology and beauty. It’s also acquiring brands in categories that have a higher barrier to entry, such as cleaning products with chemical ingredients, president Danny Boockvar told Modern Retail.
Aggregators are also working to improve their marketing and merchandising capabilities to enhance their brands’ exposure on multiple platforms. That means looking to buy SaaS media services and ecommerce consultancies that can help aggregators tie together the data they collect from Amazon. This could help them better forecast their marketing campaigns and synchronize their pricing strategy on multiple platforms, according to Dan Parker, VP of data and analytics at Thrasio.
Aggregators buy top-selling Amazon FBA businesses and consolidate them into one brand. They typically acquire larger brands that hit at least $1 million in annual revenue and have solid profit margins.
Aggregation companies like Thrasio 100m are able to leverage their size to maximize their growth potential. They can assemble teams of best-in-class operators to optimize every aspect of each brand from research and development, supply chain management, to marketing.
A key component of these firms’ value proposition is the fact that they provide their sellers with a stabilization payment as long as the business maintains its pre-acquisition level. They also provide performance earnout to sellers whose brands grow under their ownership.
This strategy allows aggregators to increase their valuation multiples each time they acquire an Ideal News Tech brand. However, it’s important to understand the details of these acquisitions before making an offer on a brand. Having this information will allow sellers to make informed decisions about whether or not to sell their brands to these companies.