One trend we’ve tracked throughout 2021 is what we call the “great eCommerce rollup.” This reflects the emerging business model to buy up disparate third-party Amazon marketplace sellers — otherwise known as FBA’s (or fulfilled by Amazon) — and get them on the same eCommerce and logistical systems.
The thought is that there’s long-tail value in these smaller operations. Moreover, rolling them up can achieve common standards, marketing, and economies of scale. This often involves getting sellers on one platform to federate them and achieve all of these standards and scale advantages.
After we first covered the trend, we continue to see companies emerging to replicate the model. And there’s ample headroom considering the sheer volume of five million FBAs. We’re also beginning to see some that zero in on geographies and verticals to achieve specialization and (again) standardization.
The Latest Action
To chronicle this ongoing trend and identify the latest entrants, we’ve tracked several recent company launches, funding, and other milestones over the past few months. The latest action is assembled below for Localogy Insider readers.
– Boston-based Thrasio closed an all-equity Series D of more than $1 billion, which it will use to acquire more companies (a common reason for FBA aggregator funding), and expand internationally. It already has 200 brands in its portfolio.
– Berlin Brands Group has raised $700 million in equity and debt to build out its fullfilment, logistics and platform; and to fuel ongoing FBA acquisitions. The mix of equity and debt says a lot about the capital intensive yet non-dilutive financing structure that’s beginning to appear common for FBA rollups.
– London based Heroes has secured $200 million to continue acquiring Amazon FBA merchants. It specializes in babies, pets, sports, personal health and home and garden verticals.
– London-based Olsam has raised $165 million for its FBA aggregator play that focuses on consumer and B2B merchants. The combination of equity and debt will be used for more M&A, as well as platform development and hiring.
– Latin-American focused FBA rollup Merama raised $60 million in series B funding, bringing its post-money valuation to $1.2 billion.
– London-based Gravitiq raised $55 million in seed funding, comprised of an undisclosed mix of equity and debt. Founded by former physicians, the company specilizes in FBAs in the healthcare and wellness vertical.
– Beijing-based FBA aggregator Nebula Brands closed $50 million in Series B funding, bringit its total capital raised to date to $60 million.
– Middle East and Africa focused FBA rollup Opontia closed a $42 million Series A after launching in June with $20 million in debt and equity funding.
– Mexico-based Quinio has secured $20 million in debt-and-equity to be used to add more than 30 brands to its FBA portfolio.
No Signs of Slowing
So there you have it. It’s clear that the FBA roll-up trend is accelerating. Covid-driven eCommerce inflections seen at the height of the pandemic have lifted all boats in the online shopping realm. But as the retail world returns to normal (kind of), eCommerce likely won’t drop to pre-Covid levels.
That notion continues to drive eCommerce investment and innovation. And when we say eCommerce, we mean any application of the “e” in eCommerce. That means online shopping but also any digitally-infused commerce, including local delivery and pickup… which have inflected as well.
Meanwhile, giants like Amazon aren’t just benefiting from elevated eCommerce levels, but as retail tech platforms. The ongoing retail as a service (RaaS) trend continues, including Amazon and Walmart’s continued moves to spin out internal tech and logistical tools to enable third-party retailers.
You could argue that it’s already done this for the third-party sellers in its FBA program. And that brings us full circle to the great rollup. Amazon appears supportive of these rollup players as they stimulate eCommerce activity. We’ll keep tracking this trend as it shows no signs of slowing into 2022.
