Upper90’s strategy of cutting checks with credit and equity may be more relevant than ever

When Billy Libby and Seamless co-founder Jason Finger launched Upper90 in 2018, they wanted to solve a problem: founders giving up too much equity too early because they needed money to build capital-intensive businesses. They thought if they wrote checks that combined debt and equity, founders could get the capital they needed while keeping more of their equity.

So far, they’ve seen demand. Over the past four years, that strategy helped the firm back startups including Amazon aggregators Thrasio and Elevate Brands, in addition to supply chain startups like Beacon. Now that equity is getting increasingly expensive as investors deploy more conservatively after last year’s fever. Libby told TechCrunch he thinks Upper90’s strategy will become more useful to founders than ever.

Goat Brand Labs, a house of D2C brands in India, raises $50 million

Goat Brand Labs has raised $50 million in fresh funding as the Indian direct-to-consumer brand aggregator looks to acquire more premium brands and help them scale globally.

Winter Capital, Vivriti Capital, 9Unicorns, Venture Catalysts and Oxyzo financed the Bengaluru-headquartered startup’s Series A funding, which includes some capital that has been raised as debt. The new funding follows Goat raising $36 million funding from scores of investors including Tiger Global, Flipkart Ventures, Mayfield and Better Capital last year. Most of these investors participated in the new round.

Goat Brand Labs — founded by Rishi Vasudev, a former Flipkart executive, and Rameswar Misra, who previously started menswear brand Turms and served as senior vice president of women-focused apparel e-commerce marketplace Voonik — operates in the same space as Thrasio, the Boston-based startup widely credited with the success of this model.

Goat Brand acquires lifestyle brands and helps them scale globally. These brands typically have “good consumer connect, Instagram following, direct sales with their own websites or platforms such as Shopify, Myntra and Ajio,” Vasudev told TechCrunch.

Goat acquires brands that are usually clocking an annual revenue in the range of $2 million to $10 million, he said. The startup says its team brings operational expertise in the lifestyle category and helps them grow two to three times in a year while also turning them profitable.

Goat Brand Labs team (Image credits: Goat)

In the past one year of its operation, it has acquired 15 brands including celebrity-styled Label Life, fashion jewellery Voylla, Indian wear trueBrowns & Abhishti, children wear Frangipani and beauty and skin care platform Neemli and Nutriglow.

The startup plans to deploy the fresh funds to acquire several more premium brands. It is in advanced discussions with 12 brands currently, Goat Brand Labs said.

“Our journey of taking Indian D2C Brands global has just started. We are fortunate to partner with great founders and continue to learn and build capabilities in this fast changing space,” said Vasudev. “I welcome our new investors and the strong support from our existing ones in this funding round. We will continue to acquire high potential D2C brands across the Lifestyle segments and scale them to huge outcomes.”

Scores of entrepreneurs are attempting to find better e-commerce models across the globe. Many investors believe that Amazons and Flipkarts of the world have laid the railroads for digital commerce, but smarter and more profitable businesses can be built atop of them. Other startups operating in the space in India include Mensa, Global Bees, EvenFlow Brands, 10club, and Powerhouse91.

Tech layoffs don’t happen to companies, they happen to people

Hello and welcome back to Equity, a podcast about the business of startups, where we unpack the numbers and nuance behind the headlines.

This is our Wednesday show, where we niche down to a single topic, think about a question and unpack the rest. This week, Natasha and Alex asked: What does the most recent wave of layoffs mean for tech workers?

The question comes after Natasha’s recent Startups Weekly column, “The Great Resignation, meet the Great Reset.” In the piece, which included a round up of recent tech layoffs, she explored the idea of employee whiplash, and why this moment in pullback is different than what we saw in March 2020.

The goal of the episode was to humanize the tech layoffs we’ve seen ripple across the startup ecosystem, from buzzy, big names like Cameo, On Deck and Robinhood, to B2B platforms like Workrise and Thrasio. As our piece last week notes, the common thread between most of these layoffs, according to founders, is that there’s been a shift in the market and a serious pivot in business is required. A pivot, that is, that hurts the employees that built your product up after high demand.

Let us know how we did?

If you or a friend has recently been laid off, tip Natasha Mascarenhas or Alex Wilhelm on Twitter @nmasc_ and @alex. 

Equity drops every Monday at 7 a.m. PT and Wednesday and Friday at 6 a.m. PT, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts.

Post-pandemic reset leads to wave of layoffs in tech

Ok, maybe it is a reckoning.

Over the past week, we’ve witnessed an alarming amount of layoffs across the startup ecosystem, from buzzy, big names like Cameo, OnDeck and Robinhood, to b2b platforms like Workrise and Thrasio. The common thread between most of these layoffs, according to founders, is that there’s been a shift in the market and a serious pivot in business is required. A pivot, that is, that hurts the employees that built your product up after high demand.

A pullback has been in the cards for months. It first impacted public tech companies and then slowly trickled down to late-stage deals and even their well funded early-stage counterparts. In February, Hopin cut 12% of staff, citing a goal of more sustainable growth while April included Workrise cutting staff and verticals despite a $2.9 billion valuation.

Now feels like an inflection point, in which tech unicorns are realizing that they may have overpromised a growth trajectory, over-hired, or overestimated their ability to raise that next round. They aren’t alluding to the market changing, they’re blaming it. The irony here is tough: the same workforces that helped companies meet a boom in pandemic demand, are the same workforces on the chopping block when trends change.

Below, we’ve listed out which companies announced layoffs this week to underscore the unfortunate, albeit growing, trend:

Cameo conducts layoffs a year after hitting unicorn status

Getting laid off sucks. Getting laid off sucks even more when your Bored Ape-owning CEO tweets that he made the “painful decision to let go of 87 beloved members of the Cameo Fameo.” Damn, at least spare them from the corporate nicknaming in your farewell tweet.

These layoffs included teams across all organizations, including several C-suite. In a statement to TechCrunch, CEO Steven Galanis said that Cameo’s headcount “exploded” from 100 to 400 during pandemic lockdowns, but that now, the company “right-sized the business to best reflect the new realities.”

Employees who spoke to TechCrunch on the condition of anonymity said that they will receive severance packages that include eight weeks of base salary.

Robinhood to lay off 9% of full-time employees

The gamified consumer investing app Robinhood cut about 300 employees at the end of April, and like Cameo, the company cited an inability to keep up with early-pandemic acceleration. CEO Vlad Tenev wrote in a blog post that the company’s headcount grew from 700 to nearly 3800 from 2019 to 2021.

“After carefully considering all these factors, we determined that making these reductions to Robinhood’s staff is the right decision to improve efficiency, increase our velocity, and ensure that we are responsive to the changing needs of our customers,” he added.

Days later, Robinhood announced its Q1 2022 earnings, which fell far below expectations.

On Deck cuts 25% of staff, scales back accelerator

On Deck, a tech company that connects founders, laid off about 72 people this week, which amounts to about 25% of staff.

In an email obtained by TechCrunch, co-founders Erik Torenberg and David Booth explained to staff that the market has “shifted dramatically” since 2021, when On Deck launched its ODX accelerator program. This program gives early stage startups $125,000 in exchange for 7% of the company, backing over 150 companies to date, bringing the total investment to almost $19 million. But sources close to the company said that ODX will likely be scaled back or even shut down.

TechCrunch’s sources also alleged that the company was attempting to raise a fund between $100 and $150 million, but in reality, they landed a fund closer to $40 million, leaving them with just nine months of runway. Hence, layoffs, mostly in operations and investing roles.

On Deck’s severance packages include eight weeks of paid base salary and twelve weeks of healthcare.

Amazon aggregator Thrasio begins layoffs, names new CEO

Thrasio’s business model is to buy up and consolidate third-party Amazon sellers, but apparently, that strategy is rife with ups and downs. After being rumored to go public, Thrasio raised $1 billion in funding last year, valuing the company at $10 billion.

In a memo to employees, the company implied it was growing too big too quickly.

“Now, as we assess our strategy for the road ahead, we need to take the time to properly absorb and grow the businesses we have acquired, make sure we have rigorous processes and controls, and then look to re-scale our team in the optimal areas for growth,” the note said.

Thrasio’s internal shake-up doesn’t end with layoffs, though – the aggregator is also installing Greg Greely as its new CEO. Greely formerly was president of Airbnb and a longtime Amazon executive.

Netflix layoffs hit Tudum, its editorial arm, just five months after launch

Last year on “journalism Twitter,” it seemed like every day, a great culture reporter was leaving sites like Buzzfeed and Vice to work for Tudum, a burgeoning editorial project at Netflix. It makes sense why. One staffer told Buzzfeed that they were making three times as much money at Netflix than at their previous job.

Media workers are no stranger to layoffs, and perhaps a job at a massive tech company seemed more stable than working somewhere that recently laid off employees in a Zoom meeting with the password “spr!ngisH3r3.” But sometimes, the tech industry can be equally as cruel.

The project was championed by chief marketing officer Bozoma Saint John, who left Netflix last month after under two years. That departure left Tudum on shaky footing. Plus, Netflix reported that in the first quarter of 2022, it lost 200,000 subscribers — its first subscriber loss in over a decade. These losses are expected to continue, as Netflix forecasts a global paid subscriber loss of 2 million for the second quarter.

The layoffs reportedly affected 25 people total across Netflix’s marketing department. According to a tweet from a laid off writer, the staff was only offered two weeks of severance pay.

Fintech MainStreet cuts about 30% of staff, citing ‘incredibly rough market’

MainStreet, a startup that helps other startups uncover tax credits that was valued at $500 million last year, has laid off about 30% of its staff, according to a tweet from CEO Doug Ludlow. The chief executive said that “today’s incredibly rough market” is going to get worse and could remain for months, if not years. Like many fintechs, MainStreet is a startup that depend on other startups growing – making it especially vulnerable to any sort of pull back.

If you have been impacted by a startup layoff, reach out to Natasha Mascarenhas or Amanda Silberling via e-mail or Twitter DM: @nmasc_ or @asilbwrites

Amazon aggregator Thrasio begins layoffs, names new CEO

A day of reckoning has come for Thrasio, one of the bigger startups buying up and consolidating third-party Amazon sellers. TechCrunch has learned from sources that the company, valued last year at between $5 billion and $10 billion, is going to be laying off a proportion of its employees this week. That news is coming at the same time that Thrasio is changing its leadership: today it announced that Greg Greeley, a former president of Airbnb and a longtime Amazon executive, is joining its board and taking on the role of CEO this August.

He will be succeeding Carlos Cashman, one of the co-founders of the company, who will remain on Thrasio’s board as a director.

The layoffs and new CEO appointment are the latest developments in a series of ups and downs for Thrasio in the last six months that underscore some of the challenges in the aggregator business model:

– In April 2021, when Thrasio was announcing a $100 million raise, co-founder Josh Silberstein – who at the time was co-CEO at the company with Cashman – told TechCrunch that Thrasio was eyeing up a public listing to raise more money for expansion, either through a traditional IPO or via a SPAC; it was also appointing a new CFO to oversee the process.

– The SPAC idea started to take shape over the summer, potentially valuing Thrasio as high as $10 billion. But then the new CFO left in July, just three months after joining; Silberstein subsequently left the company in September; and by the beginning of October, the SPAC option was delayed, reportedly due to problems that arose during a financial audit.

– Yet by the end of that month, Thrasio announced another private fundraising, a whopping $1 billion deal led by Silver Lake, which was when it hit its $5-10 billion valuation.

– Last week, people were sharing an email allegedly looking for investors in the company via a special purpose vehicle at a $2.7 billion valuation. Tellingly, the sender has gone silent (meaning: it may well be a hoax). The company declined to comment.

Unfortunately, the layoffs are not a hoax. TechCrunch confirmed the rumors with the company, and we have also been shown an internal memo that explains how they will be carried out: people will be getting informed by their managers over the next two days (Tuesday and Wednesday).

The company said in the memo that it “made the decision to reduce the size of the Thrasio team,” but it has not confirmed how many employees will be impacted.

We understand that the layoffs will be part of a bigger reorganization. In that memo to employees, Cashman and Thrasio president Danny Boockvar write that in order to keep Thrasio on its trajectory, the company would need to make certain “strategic and operational changes.”

“This is not an easy decision – especially within a culture like ours that is shaped around community and sharing,” they added.

Employees being let go will receive “severance, healthcare, job support, and accelerated vesting of some of your options,” as well as career transition support and an alumni network for continued support, the memo mentioned. Their final working day will be May 13.

Thrasio’s growth

Thrasio was founded in 2018 by Cashman and Silberstein, to capitalize on a very Amazon-like economy of scale: the Amazon Marketplace has millions of businesses and brands selling on it (nearly 2 million active sellers by one estimate) and there is a business to be built in bringing some of them together to run more efficient production, marketing and analytics, and fulfillment across them.

The businesses would be picked up by Thrasio, which would invest in tech to run them better and more profitably as e-commerce operations, both on Amazon and potentially outside of it as well – a new kind of Procter & Gamble for the twenty-first century.

It raised nearly $3.4 billion in funding to build out its business, acquiring hundreds of brands, with investors including the likes of Silver Lake, Advent International, Oaktree, Upper90, Harlan and more. When it raised its $1 billion round last October, it was buying businesses at a rate of 1.5 per week and had some several hundred brands in its portfolio.

Dozens of other aggregators followed in Thrasio’s wake – some 150 according to Thrasio’s estimates, collectively raising some $15 billion in capital to fuel those ambitions – eyeing up the same opportunity as Thrasio was chasing. Thrasio itself became a top-five seller on Amazon.

Where Thrasio is headed

It’s not clear why a financial audit would have stalled Thrasio’s SPAC last year, but it speaks to some of the challenges of running a business and accounting for it when it’s evolving at a fast pace, and at its heart is about bringing multiple other businesses together.

The concept of consolidating repetitive processes across multiple retailers sounds like a great idea in theory.

“What happens when you get into that price range is that it gets hard to grow your business and manage it,” Silberstein told me last year, citing SEO, marketing and supply chain management as some of the challenges. “That means as you grow from $1 million to $10 million, the margins would decrease and it gets even harder to make returns. We simply observed the reality that all these great companies had reached a point between a lack of access to capital and simply not being able to keep doing what they do. We thought, if we acquire 10-20 of these we would have the scale to build best in breed supply chain, marketing and so on. We would fix the problem.”

But in reality Thrasio has been building a business spanning a number of different consumer categories, geographies and demographics. Integrating even similar businesses can be costly and difficult (and it often goes wrong).

And aggregators generally position themselves as solving those issues with tech, but in some cases, aggregators are not building as much technology as you might think: they are buying in third-party tools to help with SEO, fulfillment and more.

In that context, the move to bring in Greeley – whose roles at Amazon included running its global Prime program – suggests that the company wanted a more seasoned executive at the helm to keep its long-term strategy on the right path, especially given Greeley’s background and track record in the consumer marketplace space.

Cashman has also been grappling with another controversy outside of Thrasio. He is facing a lawsuit being brought against him by Stacy Chang, an investor who left Founders Fund to join Cashman in a new venture capital firm called Arrowside Capital. She alleges he dismissed her after deciding not to move forward with the firm, and she is seeking damages, including for work she says she did over a six-month period.

Thrasio also alludes to growing too big, too fast in the joint memo to employees. “Now, as we assess our strategy for the road ahead, we need to take the time to properly absorb and grow the businesses we have acquired, make sure we have rigorous processes and controls, and then look to re-scale our team in the optimal areas for growth.”

They went on to say that some of that included “refining” its M&A team to be able to handle acquisitions and integrate them into the company’s processes, as well as “undergoing our transformation in an environment with a pandemic, a war, a sharp rise in inflation, supply chain disruptions and changing consumer behaviors.”

This is unlikely to be the final chapter for Thrasio, which remains the owner of hundreds of big-selling e-commerce brands. But the big question will be whether it continues as a single entity under Greeley, and whether it continues to grow as it has; or whether it takes a course to “rationalize” some of the many investments and acquisitions it has made over the years.

“Just four years ago, the innovative team at Thrasio created an entirely new way for this community of entrepreneurs to achieve their business goals and see the reach of their products expand – and Thrasio continues to blaze the trail,” Greeley noted in a statement today. “It’s been truly remarkable – and it’s still early in a marketplace with nearly $400 billion in total third-party sales in 2021 and trillions more in the broader retail ecosystem.”

India’s GlobalBees joins unicorn club for its Thrasio-like house of brands

GlobalBees, which raised one of the largest Series A financing rounds in India earlier this year, has entered the unicorn club as the New Delhi-headquartered firm scales its Thrasio-like house of brands.

Premji Invest, the investment firm controlled by Indian tycoon Azim Premji, led the nine-month-old startup’s Series B financing round, the young firm disclosed in a regulatory filing. The round, about $110 million, values GlobalBees at over $1.1 billion, the filing showed.

Steadview Capital, and existing investors SoftBank and FirstCry, also participated in the $110 million equity round. Trifecta Capital additionally invested $30 million as debt in the new round.

Founded by Nitin Agarwal, formerly of Edelweiss Financial, and Supam Maheshwari, a founder of FirstCry, GlobalBees acquires and partners with digitally native brands across categories such as beauty, personal care, home and kitchen, food and nutrition, and sports and lifestyle, with a revenue rate of $1 million to $20 million.

GlobalBees helps these firms scale and sell to marketplaces and through other channels in India and outside of the South Asian market.

“We have created and engaged with brands in the past and realized that most of these brands reach a scale after which it becomes too difficult to scale them,” Agarwal told TechCrunch in an interview earlier this year. He declined to comment on the new fundraise.

“Supam and I have been talking about this for several years, trying to find ways to disrupt this market. We think there’s an opportunity to create a new house of brands that is digital-native.”

At the time, Agarwal said GlobalBees was looking to acquire up to three dozen brands. Indian news and analysis publication the CapTable, which reported about GlobalBees’ talks to raise a round at the unicorn valuation in October, said then that GlobalBees was in different stages of conversations to close deals with at least 15 brands.

Some of the brands GlobalBees has acquired in recent months. (Data: Tracxn)

Scores of startups in India today are trying to replicate what is popularly known as the Thrasio-model. (Though it’s worth noting that Thrasio took about two years to become a unicorn.)

Mensa Brands, a similar venture by former fashion e-commerce Myntra’s chief executive, recently raised a $135 million Series B financing round that valued the startup at over $1 billion. It was six months old at the time of the funding announcement. Titan Capital, which has backed about 200 startups in India, has invested in Powerhouse91. 10club, another similar startup, raised $40 million earlier this year— though much of it was in debt.

Like Thrasio, several of these firms are trying to acquire brands that sell midrange to high-end products in categories where competition is limited. In fact, some of the categories that are common among these brands are so underappreciated that even Amazon and other e-commerce firms have not explored them through their private label ecosystems.

With more than 800 brands, India is quickly becoming a fast-growing market for direct-to-consumer brands.

Many investors believe that the Amazons and Flipkarts of the world have laid the rails for digital commerce, and smarter and more profitable businesses can be built atop them.

“Newer models on social commerce will continue to penetrate deeper into Bharat while revenue based financing models will provide an alternate financing option to equity dilution conscious smaller D2C brands. At the same time, consumers will demand frictionless post-checkout journey (auto filled card/customer details, RTO predicts, one step checkout). Startups providing shovels in the gold rush (Shiprocket, GoKwik) will have the potential to reap big wins,” a recent analysis said.

GlobalBees joins over 40 other India-based startups that have entered the unicorn club this year, up from 11 last year. Several high-profile investors, including SoftBank, Falcon Edge Capital and Tiger Global have doubled down on their investments in the South Asian market in recent quarters.

Thrasio, the Amazon aggregator, raises $1B in fresh funding at a valuation of up to $10 billion

One of the big leaders in buying up and scaling third-party merchants selling on Amazon and other marketplace platforms is announcing a major round of funding today as it continues to expand its ambitions. Thrasio, the Boston-based startup, has closed an all-equity Series D of over $1 billion — a huge infusion in cash that it will be using to continue buying up more companies as well as to expand internationally. It said that it’s currently on a rate of buying 1.5 businesses per week and now has some 200 brands in its portfolio.

Silver Lake and Advent International led the round, with Advent remaining the company’s largest shareholder. Upper90, funds managed by Oaktree Capital Management, L.P., PEAK6 Investments and Corner Capital — all previous backers — were also in the round.

Thrasio has confirmed to me that the valuation is between $5 billion and $10 billion but declined to get more specific. As a marker of where it was prior to this round, in April of this year, when it raised $100 million, Thrasio was valued at $3.7 billion. Just on a straight added-capital basis that would put its valuation at close to $5 billion but the company also notes that it has been seeing accelerated growth — the number of brands under its wing has doubled since then to 200 — so very likely some ways higher than that. Current brands include Angry Orange pet deodorizers and stain removersSafeRest mattress protectors and ThisWorx car cleaning and detailing products.

The company, founded in 2018, has now raised $3.4 billion, including a $650 million debt round earlier this year.

Thrasio is one of the pioneers of the modern “roll up” player, and its traction, along with the wider opportunity in the market, have spawned dozens of other startups around the world building businesses replicating its model that have collectively raised hundreds of millions of dollars in equity and debt to build out their businesses. Other recent fundings in the space have included Heroes, which raised $200 million in August; Olsam ($165 million); Suma Brands ($150 million); Elevate Brands ($250 million); Perch ($775 million); factory14 ($200 million); as well as HeydayThe Razor GroupBrandedSellerXBerlin Brands Group (X2), Benitago, Latin America’s Valoreo and Rainforest and Una Brands out of Asia.

One of the reasons it has raised so much in this round is to better target that global opportunity. Thrasio already has operations in the UK, Germany China and Japan and the plan is to expand that further, both as a means of finding more companies to gobble up, but also to expand its wider supply chain.

That wider opportunity, meanwhile, remains a large one despite how crowded the market is getting. By various estimates there are between 5 million and 10 million third-party merchants selling on Amazon alone, leveraging the e-commerce giant’s giant audience of shoppers and its Fulfillment by Amazon platform for delivery and other distribution logistics to cut down the operational costs and inefficiencies of building a direct-to-consumer business from the ground up. Thrasio’s co-founder Josh Silberstein (who stepped away as co-CEO a couple of months ago) told me earlier this year that Thrasio estimates that there are around 50,000 businesses out of those that make more than $1 million in revenues annually, so the tail of what is out there in terms of size is very long.

Thrasio is building out a bigger economy of scale play around that basic model, and in some cases replacing some of the Amazon components with scale of its own, which — the theory goes — only improves as it grows. That includes sourcing for products (as well as wider supply chain challenges), analytics both to source the more interesting companies to buy up as well as to market those products once under the Thrasio wing, even its own fulfillment technology. It is also increasingly also looking at opportunities to build sales and customer relationships outside of the Amazon ecosystem, using other marketplaces, other sales channels and in some cases direct-to-consumer plays.

(And that analytics engine for sourcing potential acquisitions is working hard: Thrasio says that it has “evaluated” some 6,000 businesses overall.)

“Our business is getting better as it gets bigger, and these investments will be invaluable as we continue on that path,” said Carlos Cashman, the other co-founder and CEO of Thrasio, in a statement. “Advent and Silver Lake both have phenomenal track records of building successful global businesses, and the additional funds from existing investors including Upper90 and PEAK6 are extremely rewarding votes of confidence in a crowded space.”

“Thrasio created the Amazon aggregator category, and their innovative approach and impressive growth have brought a lot of attention to this space,” said Greg Mondre, co-CEO, and Stephen Evans, managing director, of Silver Lake, in a joint statement. “We believe Carlos Cashman and his team are well positioned to accelerate their growth and build the preeminent next-generation, technology-driven consumer goods company. We’re excited to partner with Carlos, his team and the existing shareholders as the company enters the next phase of growth.”

“Thrasio has quickly established itself as the largest e-commerce aggregator globally, and we are thrilled to strengthen our partnership with Carlos and his team, in addition to welcoming Silver Lake as a new investor,” added David Mussafer, chairman and managing partner and Jeff Case, managing director, of Advent International. “Thrasio is well positioned for further success, and we look forward to working with the company as it continues to scale.”

Updated to note that Silberstein is no longer co-CEO

India’s GlobalBees raises $150 million to build Thrasio-like house of brands

The universe of Indian firms attempting to replicate Thrasio’s success in the world’s second largest internet market just got bigger. Three-month-old GlobalBees said on Monday it has raised $150 million in a Series A financing round led by FirstCry.

Lightspeed Venture Partners also invested in the new financing round, which is $75 million in equity and $75 million in debt. Even with a $75 million equity raise, Monday’s announcement makes GlobalBees’ round one the largest Series A fundings in India.

Founded by Nitin Agarwal, formerly of Edelweiss Financial, and Supam Maheshwari, a founder of FirstCry, GlobalBees acquires and partners with digitally native brands across categories such as beauty, personal care, home and kitchen, food and nutrition, and sports and lifestyle with a revenue rate of $1 million to $20 million.

New Delhi-based startup then helps these firms scale and sell to marketplaces (such as Amazon and Flipkart) and through other channels in India and outside the South Asian market, Agarwal told TechCrunch in an interview. He said GlobalBees has already acquired or partnered with over a dozen brands and they are selling both in India and outside of the country.

“We have created and engaged with brands in the past and realized that most of these brands reach a scale after which it becomes too difficult to scale them,” he said. “Supam and I have been talking about this for several years, trying to find ways to disrupt this market. We think there’s an opportunity to create a new house of brands that is digital native.”

Agarwal said GlobalBees will attempt to build a distribution and enterprise ecosystem in the online space similar to how traditional firms have established those connections in the offline world. (Not all brands GlobalBees engages with will get acquired on day one, Agarwal said. Typically, some brands get acquired in a span of three years or so, he said.)

“The time it takes for D2C brands to go from 0 – 100Cr (about $13 million) in revenue has more than halved over the past few years,” said Harsha Kumar, Partner at Lightspeed Venture, in a statement.

“We believe that this creates a unique opportunity to create a brand house much faster as well. With their past entrepreneurial stints together and their experience in building one of the largest ecommerce platforms in India, the duo of Supam and Nitin is the perfect team to go after this idea. Lightspeed is thrilled to be part of this journey!” said Kumar, who is joining the board of GlobalBees.

Scores of startups in India today are trying to replicate what is popularly known as the Thrasio-model. Mensa Brands, a similar venture by former fashion e-commerce Myntra chief executive, recently raised $50 million in equity and debt. 10club, another similar startup, recently raised $40 million — though much of it is in debt. TechCrunch reported last month that UpScale, another prominent player in this space, is in advanced talks with Germany’s Razor Group to raise capital.

Like Thrasio, several of these firms are trying to acquire brands that sell midrange to high-end products in categories where competition is limited. In fact, some of the categories that are common among these brands are so underappreciated that even Amazon and other e-commerce firms have not explored them through their private label ecosystems.

GlobalBees’ Agarwal agreed with this assessment, though he added that not all brands are operating in niche categories.

New York-headquartered Thrasio, which has raised over $1.3 billion in equity and debt since December last year, had acquired or otherwise consolidated about 6,000 third-party sellers on Amazon as of earlier this year.

“India is at the cusp of a D2C revolution with an estimated market size of $200 billion in the next 5 years. Indian brands have shown great promise in the recent years, and we believe that GlobalBees is building great assets to accelerate the growth of digitally native brands in the country,” said Vikas Agnihotri, Operating Partner, SoftBank Investment Advisers, in a statement.

Agnihotri, alongside Atul Gupta of Premji Invest, Sudhir Sethi of Chiratae Ventures and Kshitij Sheth of Chrys Capital are also joining GlobalBees’ board.

10club raises $40 million seed funding to build Thrasio of India

10club, a one-year-old Indian startup that is building a Thrasio-like venture, said on Tuesday it has raised $40 million in what is one of the largest seed financing rounds in the South Asian market.

The round was co-led by Fireside Ventures (a prominent Indian investor in consumer and hardware tech space) and an unnamed global investor, the Indian startup said, without revealing the other firm’s name. HeyDay, PDS International, Class 5 Global, Secocha Ventures, and founders of hardware startup boAt (Aman Gupta and Sameer Mehta) also participated in the round. It’s not clear whether the round also includes debt — as is popular among Thrasio-like ventures — and if the entire financing is being wired in one tranche.

10club acquires small brands that sell their products on e-commerce platforms and scales those businesses.

“Great businesses are growing on the backs of e-commerce giants like Amazon, Flipkart, Nykaa and more. They get their foundational years right but find it difficult to scale, and understand that competition is hard to curb.That’s where we step in, allowing you – the entrepreneurs – to enjoy an exit and benefit from years of hard work,” the startup describes on its LinkedIn page.

10club is one of a few dozen firms that is attempting to replicate what is popularly known as the Thrasio-model in India. Mensa Brands, a similar venture by former fashion e-commerce Myntra chief executive, recently raised $50 million in equity and debt. TechCrunch reported earlier this month that UpScale, another prominent player in this space, is in advanced talks with Germany’s Razor Group to raise capital.

Like Thrasio, several of these firms are trying to acquire brands that sell mid-range to high-end products in categories where competition is limited. In fact, some of the categories that are common among these brands are so under-appreciated that even Amazon and other e-commerce firms have not explored them through their private label ecosystems.

New York-headquartered Thrasio, which has raised over $1.3 billion in equity and debt since December last year, had acquired or otherwise consolidated about 6,000 third party sellers on Amazon as of earlier this year.

“India and online-first brands are at the cusp of the next revolution. We, at Fireside, believe that both VC and acquisition driven model will co-exist going forward and can turbocharge the growth of early-stage brands. Together with the team at 10Club, we will be able to drive this change and enable e-commerce entrepreneurs to realize the full potential of their brands,” said Vinay Singh, Partner at Fireside Ventures, in a statement. As part of the deal, Singh is also joining 10club’s board.

Bhavna Suresh, co-founder of 10club and former chief executive of real-estate marketplace Lamudi, said the startup has already built its foundational pillars of the centralized platform and signed letters of intent worth $15 million from several firms and will deploy the fresh capital to operate the new businesses.

Led by ex-Amazonians, Acquco raises $160M to buy and scale e-commerce businesses

There has been a flurry of investments in startups focused on acquiring third-party sellers on Amazon and helping them build their businesses.

The latest is Acquco, which aims to stand out from the others in that it was formed by a pair of founders — Raunak Nirmal and Wiley Zhang — who actually worked at Amazon, and then built multimillion-dollar businesses on its platform.

The New York City-based startup has raised $160 million in debt and equity in a Series A round that it says will fund its “aggressive growth plans.” CoVenture, Singh Capital Partners, Crossbeam and other notable investors such as GoDaddy CEO Aman Bhutani put money in the equity portion of the round. Acquco would not disclose the valuation at which the money was raised, nor the exact breakdown of debt and equity, other than to say “a significant portion was equity.” But CEO Raunak Nirmal did share a few other notable things. 

For one, the company has already scaled to over $100 million in revenue since its founding (in a year’s time) while deploying less than $2 million of equity capital. Plus, it’s been profitable “since day one,” he said.

Nirmal also claims that Acquco’s proprietary technology and “proven playbooks” give it an edge against competitors such as Thrasio and Perch. Specifically, the company says it helps Amazon sellers exit their business within 30 days and continue to scale their business “to the next level” post-acquisition. It also claims to offer flexible terms and that it does not prevent entrepreneurs from selling again on Amazon.

Acquco says it identifies the best businesses to acquire, and leverages what it describes as “flexible founder-friendly deal structures,” which essentially gives sellers a way to make money from the exit and then still get a cut of revenues down the line. The company claims that it on average achieves over 100% revenue growth after migrating brands onto its platform.

Forming Acquco was not an overnight story, but rather was years in the making.

“My first job out of college was actually at Amazon. I worked as a business analyst on the merchant technologies team there, which was really focused on third-party selling and helping empower third-party sellers to grow on the platform and then just growing that segment of the business,” Nirmal recalls. “At the time, third-party selling was smaller than the retail side for Amazon.”

A lot has changed since then, of course, as that segment of the e-commerce giant’s business has grown dramatically. 

In recent years, most sales on Amazon have come through Amazon Marketplace, where millions of outside sellers compete to find customers. Many pay Amazon to store and ship their goods, making them eligible for Prime shipping through an arrangement known as Fulfillment by Amazon, or FBA. This is where Acquco is focusing. 

While at Amazon years ago, Nirmal was tasked with starting a brand on the site so he could better understand sellers’ pain points, as well as the tools that could be built “to really help them grow.”

Eventually, Nirmal left Amazon to pursue selling on Amazon full time because the brand he’d started ended up selling over $7 million in its first year. After that, he and COO Zhang built and sold multiple brands in the Amazon ecosystem before going on to consult for “some of the largest sellers in the marketplace,” primarily based in China but selling in the U.S. market.

“A lot of these guys are actually public companies now,” Nirmal said. 

The duo went on to co-found a seller outsourcing firm in the Philippines, which helps to minimize the cost of operating the brands for sellers and make it more accessible for sellers that don’t have a huge team to build something on Amazon. 

Then they founded a company called Refund Labs, a seller tool that helps sellers essentially automatically identify issues in the payments that they receive from Amazon as well as recover money on their behalf for things like inventory that gets damaged or lost or the fees that are being charged that might be incorrect. 

Nirmal stepped down as CEO of Refund Labs to form Acquco.

“What we wanted to do is take this knowledge and experience that we really have built up over the last seven years, and apply it in the best way possible,” Nirmal told TechCrunch. “And rather than building brands from the ground up, or consulting for some of these large sellers, we thought, ‘Why not go and buy the best brands, and then help grow them using our expertise?’ ”

The company says its proprietary algorithms analyze thousands of criteria sets and millions of data inputs “to automate and maximize the performance of the core functions within supply chain and brand management” across their portfolio. 

Acquco plans to use its new capital to enter “hypergrowth mode,” according to Chief Strategy Officer Jerel Ho, who most recently led corporate development and strategy at WeWork, where he closed over $40 billion in M&A deals.

The startup has the ambitious goal of scaling its portfolio to over $500 million in revenue by 2022. It plans to put the new money toward continuing to build out its technology platform — including tools that can automate the management of an entire brand on Amazon and across other retail channels — as well as continuing to acquire brands. It’s also, naturally, going to do some hiring.

“We’ve done a lot with very little,” Ho told TechCrunch. “But hyper growth plans require a much larger team across all functions.”

CoVenture founder Ali Hamed says that the Amazon third-party seller ecosystem does $200 billion of revenue and is growing at a compounded annual growth rate (CAGR) of over 50%. 

“It’s the most attractive market we’ve seen since founding our firm,” he told TechCrunch. “And of all the people we’ve talked to, Raunak is as plugged into the Amazon ecosystem as anyone we could find. In many ways, he taught us how to look, think and deploy capital into the market.”

To say Hamed is bullish on Acquco would be an understatement. Since first investing in the company in 2020, Nirmal “has exceeded” all of CoVenture’s expectations.

“We’ve been begging him to take more money every three months since writing our first check,” Hamed added. “Raunak is able to help buy businesses and make them better than they ever were before. He has a vision of how to operate these assets post-purchase that other operators who are not Amazon-native just don’t have.”

Besides Thrasio, other players in the space that have recently raised funding include Branded, which recently launched its own roll-up business on $150 million in funding, as well as Berlin Brands Group, SellerXHeydayHeroes and Perch. And, Valoreo, a Mexico City-based acquirer of e-commerce businesses, raised $50 million of equity and debt financing in a seed funding round announced in February.