One of the more notable trends of 2021 that we’ve been tracking is what we call the “great eCommerce rollup.” This reflects the emerging business model to buy up disparate third-party Amazon marketplace sellers — otherwise know as FBA’s (or fulfilled by Amazon) — and get them on the same system.
The thought is that there’s ample long-tail value in these smaller operations. So companies are emerging for the sole purpose of rolling them up to apply common standards, marketing, and economies of scale. This often involves getting sellers on one platform to federate 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 so they can double down on the standardization perks above.
Rollup of Rollups
To chronicle this ongoing trend and identify the latest entrants, we’ve documented their launches, funding and other milestones over the past few months. The most notable market events are assembled below for Localogy Insider readers. That’s right, it’s a rollup of rollups…
— Berlin’s Razor Group raised $400 million earlier this month to scale its FBA rollup. Founded just eight months ago, the company has a $120 million run rate in gross sales from 30 FBAs it’s already acquired. Funding was a mixture of equity and debt (mostly the latter) for the capital-intensive process of acquiring FBAs.
— Una Brands launched earlier this month with $40 million equity and debt financing to roll up FBAs in the APAC region. But perhaps it shouldn’t be called an “FBA” given that its claim to fame is its cross-platform approach, including non-Amazon marketplaces like Shopify. This can have scale advantages but standardization disadvantages.
— Speaking of APAC-focused FBA rollups, Singapore-based Rainforest likewise launched in the last two weeks with $36 million in funding. Like many of the funding rounds in this sector, this is a combination of equity and debt, the latter being a majority at about $30 million. This says a lot about the non-dilutive financing structure that’s beginning to appear common for FBA rollups as a financial arbitrage play.
— Benitago Group raised a debt-heavy $55 million in new funding for its FBA rollup. But rather than just practicing financial arbitrage, it’s taking a tech-centric approach to creating a repeatable blueprint for eCommerce operations and growth. That includes everything from marketing to packaging and shipping logistics.
— Branded group launched earlier this year with $150 million in funding. This came after about a year of stealth activity to begin acquiring FBAs. At launch, it already acquired 20 startups across eCommerce heavy verticals like home, leisure and lifestyle. Its geographic focus is currently U.S., Europe and Asia.
— As one of the earliest movers in the FBA land grab, Thrasio earlier this year raised $750 million in funding at a post-money valuation between $3 billion and $4 billion. A bit ahead of the above players, it’s already acquired about 100 FBAs, mostly in CPG categories.
Honorable Mention: Austin-based Jungle scout recently raised $110 in equity funding. Rather than roll up FBAs as the above players do, it provides an eCommerce optimization platform that independent FBAs can deploy on their own. Think of it as a lighter form of an FBA rollup. It already powers $8 billion in Amazon revenue with around 500,000 brands and SMBs using it.
We’ll keep watching for more…