Thrasio, a Boston-based ecommerce group, has raised $750m, the biggest investment yet in the increasingly frenzied industry for rolling up small merchants who sell through Amazon.
The new equity round, led by existing investors including Oaktree and Advent, comes just a month after Thrasio’s $500m debt financing, bringing its total capital raised to $1.75bn since it was founded in 2018.
The latest round values Thrasio at more than $6bn, according to FT calculations based on company disclosures.
With Thrasio and its rivals including Perch, SellerX, Heroes and Heyday together raising about $1bn last year, competition is intensifying to acquire the most successful brands that sell through Amazon’s marketplace.
“Over the past two months, we’ve been acquiring $1.5m in revenue per day,” said Joshua Silberstein, Thrasio’s co-founder and co-chief executive. “Thrasio is now closing two or three deals every week.”
More than half of consumer spending on Amazon now goes through its marketplace, which is populated by millions of independent brands hoping to fill the endless niches of the “everything store”.
These businesses are often run by one or two people, who rely heavily on the ecommerce group’s “Fulfilled by Amazon” (FBA) infrastructure of warehouses and delivery.
Rolling up several of these small companies, as Thrasio does, can bring economies of scale with suppliers, boost customer data and marketing capabilities, and provide the working capital to facilitate international expansion.
Thrasio — whose portfolio of almost 100 brands includes skincare products, socks, weighted blankets and massage guns — was the first company to prove the “FBA roll-up” model could work. It now has more than 700 staff and has recently expanded to Germany and the UK.
Silberstein said Thrasio’s revenues exceeded $500m last year, with earnings before interest, tax, depreciation and amortisation of more than $100m. Raising equity, on top of the debt secured last month, will boost Thrasio’s expansion in the UK, Germany, Japan and China, he added.
But Thrasio’s success has also spawned more than a dozen copycats in the US and Europe, causing some investors to fear that the market — barely two years old — is already looking overcrowded. Prices for the most coveted Amazon vendors are being driven up by competitive bidding.
Earlier this week, New York-based Branded raised $150m from investors including Target Global, the venture capital firm that incubated the company, and former executives at Zynga, Alibaba and Walmart.
Branded counts Pierre Poignant, the former chief of south-east Asian ecommerce group Lazada, and Michael Ronen, a former Goldman Sachs banker who left SoftBank’s Vision Fund last year, among its leadership team.
“People are observing our results and assuming what we’ve done is easy to replicate,” Silberstein said. “People underestimate just how difficult it is to operate these businesses.”
He said that Thrasio was considering whether to go public in the “short term or medium term”, to consolidate its first-mover advantage over a growing number of rivals.
“We do worry that somebody will play games and choose the public markets as a place to claim a leadership position that they don’t own,” he said. “Our overriding concern is that we as a company are just an absolutely dominant player in this space.”
