UK and European e-commerce companies acquire Amazon (AMZN) market brands amid an increase in aggregation startups as online shopping continues to explode.
Funding worth $ 1.1 billion (£ 800 million) went to European aggregators on September 1 alone, with the industry attracting significant rounds of funding from investors.
Aggregators aim to build large e-commerce businesses by attracting smaller third-party merchants who sell direct to consumers on Amazon and other platforms. Most businesses depend on Amazon’s “Fulfilled by Amazon” feature to store and ship goods.
There are at least 21 aggregators in Europe, according to Trading Room – 19 of which have been launched since 2020. Part of the funding comes from some of the biggest names on Wall Street and Silicon Valley, including JP Morgan (JPM).
German group Berlin Brands Group (BBG) raised $ 700 million last Thursday, led by Bain Capital, making it Europe’s leading unicorn aggregator as it is now valued at over $ 1.2 billion .
Founded in 2005, BBG has developed a portfolio of 14 online brands, selling products ranging from sports equipment to home appliances.
He also raised $ 240 million in debt in April to pay for other acquisitions.
“It’s really a huge firepower in the business,” CEO and founder Peter Chaljawski said in an interview with Bloomberg. “The speed at which we acquire is accelerating quarter by quarter.”
While Bain Capital has acquired a stake of more than 40% in Berlin Brands, Chaljawski will retain the majority of the shares of the company.
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In the UK, e-commerce companies Heroes and Oslam Group raised $ 200 million and $ 165 million respectively.
On Wednesday, Heroes announced its further raise from leading U.S. institutional investor Crayhill Capital Management, which it plans to use to acquire more brands.
The company, founded by three brothers, operates and evolves the most successful Amazon brands.
Since launching in October 2020, Heroes has operated in the UK, Europe, North America and Asia, and is also backed by 360 Capital, Fuel Ventures and Upper90.
She has acquired and developed e-commerce brands in the baby, pet, sports, personal health, and home and garden categories, among others.
“By adding this significant amount of capital, we now have a high level of flexibility in executing our growth plans and significantly expand and diversify our brand portfolio,” said Riccardo Bruni, co-founder of Heroes.
“We look forward to continuing to work with the new wave of exceptional entrepreneurs to give them a fast, user-friendly and reliable way to sell their business, so that they can reap the rewards of the hard work they put into creating of their brands. “
Meanwhile, Oslam said it has raised $ 165 million in equity and debt financing, from Christian Angermayer’s investment group Apeiron and Elevat3 Capital, to buy e-commerce businesses.
The company was co-founded by brothers Ollie and Sam Hörbye, the latter having previously worked at Amazon as a team leader in its marketplace arm.
“We are in the midst of a retail revolution,” said Sam Hörbye. “We believe the Amazon marketplace platform has democratized the online retail playground.”
He added, “Small ‘mom and pop’ business owners are taking on the traditional consumer goods giants, building defensible category-leading brands that, in terms of customer reviews, dominate them.”
It comes after Amazon’s ecosystem of six million sellers generated more than $ 300 billion in sales last year, growing 50% year-over-year. This increased another 61% in the first three months of 2021.
Companies acquiring successful brands on Amazon have attracted around $ 7 billion in capital over the past 12 months, with nearly 3,000 sellers in the UK reaching $ 1 million in revenue.
Globally, several companies aim to emulate the business model of the American company Thrasio, founded in 2018 and which has acquired more than 100 Amazon sellers. The company surpassed a valuation of $ 1 billion in June of last year.
It is estimated that there are now around 40 Amazon aggregation companies worldwide, and that number continues to grow at a steady rate.
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