Thrasio raises $750M more in equity for its Amazon roll-

up play
techcrunch.com/2021/02/10/thrasio-raises-750m-more-in-equity-for-its-amazon-roll-up-play/

Ingrid Lunden @ingridlunden / 4 months

The Amazon Marketplace roll-up play is well and truly underway. In the latest development,
Thrasio — one of the biggest and earliest movers in the market to consolidate third-party
sellers on the platform, with the promise to provide better economies of scale to manage and
grow those businesses — announced that it has raised another $750 million at a valuation
that could be between $3 billion and $4 billion, or higher: a spokesperson would only say it
was “less than $10 billion.”

The funding is being led by existing backers Oaktree and Advent, and it includes
participation from previous unnamed investors. (That list of equity backers has included
Peak6, Western Technology Investment, and Jason Finger, the co-founder of one of the early
players in food delivery startups, Seamless.)

Thrasio said it will be using the money to continue its rapid pace of buying up more third-
party sellers in the “Amazon FBA ecosystem”, a reference to smaller merchants that sell and
distribute their products using the “Fulfilment By Amazon” service from the e-commerce
giant.

“Thrasio continues its exceptional growth,” said Joshua Silberstein, who co-founded and co-
leads the company with Carlos Cashman. “Over the past two months, we’ve been
acquiring $1.5 million in revenue per day.” Those are his italics. “Thrasio is now closing two
or three deals every week.”

Thrasio to date has acquired nearly 100 FBA businesses says that it reached that number by
way of evaluating 6,000 possible companies and 14,000 “category-leading products.”

Six thousand may sound like a big number, but one estimate puts the number of third-party
sellers on Amazon at around 5 million, a number that appears to be growing exponentially at
the moment, with more than 1 million sellers joining the platform last year.

The size of the opportunity, plus the Amazon-proven promise of economy of scale in the
world of e-commerce, are likely two reasons why we have seen so many startups emerging
looking to roll them up.

Thrasio’s $750 million fundraise is an all-equity venture round. A spokesperson for the
company said it was not disclosing valuation but in January, when it closed a debt round of
$500 million, it was reported that the company was valued at $3 billion.

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That was a debt round so it’s not clear whether that was taking into account this upcoming
equity injection, or if we could consider this equity round on top of that. This means that a
reasonable estimate, based on the $3 billion figure, could be anything between $3 billion and
$4 billion, but quite possibly more.

“Quite possibly more” not just because of the figure the spokesperson told us, but because
the news comes at a particularly overheated time in this specific area of e-commerce.

Thrasio’s news came out yesterday afternoon, only hours after we reported on a new rival
called Branded, which launched its own roll-up business on $150 million in funding and with
a critical detail: one of the “co-founders” is the deep-pocketed European VC firm Target
Global.

And that comes on the heels of others in this space — they include, in addition to Thrasio
and Branded, Berlin Brands Group, SellerX, Heyday, Heroes, Perch and more — collectively
raising or committing from their own balance sheets well over $1 billion in aid of their own
efforts to buy up small but promising third-party merchants.

For its part, Thrasio notes that the funding was raised quickly and diluted existing
shareholders by 11.1%, and that it has now raised $1.75 million in equity and debt.

Thrasio products do not carry any kind of Thrasio branding. But I’m guessing that as Thrasio
and its rivals look for a better edge and aim to give the impression of more quality (rather
than the fly-by-night feeling that some of these sellers have today), we may see more of that
coming out.

Brands that it owns include Vybe Percussion deep tissue massage gun, Circadian Optics
bright light therapy lamps, and skincare products from Sdara Skincare, Thrasio said.

In the competition for the best of these, Thrasio claims its marketing and analytics can help
these newcomers “compete with top household name labels, quickly becoming the trusted
items that consumers turn to for their everyday needs.”

The feverish pace of fundraising in the area of FBA roll-ups feels very much like a bubble in
the market — not least because none of these still-young companies have yet to prove that
the strategy to buy up and consolidate these sellers is a useful and profitable one.

(The only one that has stated that it is profitable, Berlin Brands Group, has done so on its
existing business model, which has involved building a variety of third-party sellers from the
ground up itself, not buying up others, with whatever legacy baggage they may carry, good
or bad.)

Thrasio is very much in the go-big-or-go-home stage of scaling with funding, and in its favor,
although it’s only three years old (founded in 2018), that age has made it one of the oldest
and more proven in this current wave.

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“In ten years, omnichannel retail will be the backbone of the entire consumer products
ecosystem – but today, it’s still in its genesis. Every day, the very fabric of this market is
twisting as it continues to evolve,” said Cashman in a statement. “Our balance sheet isn’t
built to win yesterday’s battles – it is designed to pursue the accelerating opportunities that
accompany these kinds of seismic changes in an industry.”

Updated with more detail on valuation, company comment.

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