Thrasio raises $100M for its Amazon roll-up play,

appoints retail CFO for its next steps

techcrunch.com/2021/04/01/thrasio-raises-100m-for-its-amazon-roll-up-play-appoints-retail-cfo-heavyweight-for-its-
next-steps/

Ingrid Lunden @ingridlunden / 2 months

Thrasio, an early mover and leading player in the wave of startups emerging to consolidate
and scale companies that sell their goods mainly via Amazon’s Marketplace, has raised
some more funding and is making a key executive appointment to do some scaling of its
own. The company, which to date has acquired and consolidated over 100 brands (and
15,000 products) selling on Amazon, has picked up $100 million, and alongside that it’s
announcing a new CFO, retail vet Bill Wafford, as it eyes up its next steps, including a public
listing.

The $100 million is an extension to Thrasio’s Series C — a round that saw a $750 million
injection only about six weeks ago, and a previous close of $260 million last July.

Josh Silberstein, who is the co-founder and co-CEO with Carlos Cashman, said Thrasio is
not disclosing valuation except to note that it is 50% higher than the it was a month ago for
Thrasio, which made a profit of $100 million on $500 million in revenues last year, he said.

For some context, when we reported on the $750 million round, we noted that the valuation
was potentially between $3 billion and $4 billion. All a spokesperson would tell us at the time
was that it was “less than $10 billion” although a debt round in January put the valuation at
around $3 billion.

Thrasio raises $750M more in equity for its Amazon roll-up play

It has now raised $1.85 billion in equity and debt.

Silberstein said the latest $100 million is coming from previous backers that didn’t get the
allocation they hoped for in the previous financing. The list of past backers includes Oaktree,
Advent, Harlan Capital, Peak6, Western Technology Investment and Upper 90, which is led
by Jason Finger, the co-founder of one of the early players in food delivery startups
Seamless.

Giving insiders a little more of a share also seems to hint at the fact that the company looks
to be preparing for its next steps as a business, which might include a public listing via a
SPAC or a more traditional IPO route.

“We are engaged in conversations where valuation where may once again become a topic
so holding off on additional commentary for now,” said Silberstein in response to the
question. “We’ve reached a point that there are legal consequences to being anything other

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than vague.”

As part of that process, Wafford is coming on as CFO from a previous role as CFO at JC
Penney and before that, CFO of Vitamin Shoppe, in a longer resumé that also includes
finance roles at retailers like Walgreens and Target.

(Side note: Wafford’s time at Walgreens included running Walgreens Venture Capital, and it
crossed over with the period when Walgreens inked its ultimately disastrous deals with
Theranos, although it seems that deal was made with a different division of the company
than the one he oversaw.)

Wafford is replacing Joe Falcao, a longtime employee of the company, who is taking a role
as SVP, Finance and Treasurer, to scale the company’s treasury, tax and international
finance functions.

Wafford’s experience across a range of bigger brick-and-mortar retailers that work with and
partner with smaller brands across a number of categories from fashion to health and
household goods is notable, in that it’s an analogue of what Thrasio is essentially building in
the online world, where its 15,000-plus products run the gamut from a therapeutic sock
maker, to a company that has developed a spray to remove pet odors and stains, to a high-
end kitchen goods maker.

“Thrasio’s trajectory and the speed at which it has achieved growth is impressive to say the
least, especially how they’ve capitalized on the market changes that have occurred over the
last twelve months,” said Bill Wafford, CFO, in a statement. “I’ve been delighted to discover
an energizing, team-minded culture that embraces experimentation and adaptability. I’m
thrilled to take on the role to prepare the organization for its next phase of growth.”

By one estimate there are about 5 million third-party sellers on Amazon today, a number that
appears to be growing exponentially, with more than 1 million sellers joining the platform in
2020 alone. Thrasio’s business model is based around the premise that most of them are not
that well-prepared to scale when and if the most successful of this lot see their products take
off.

Silberstein and Thrasio estimate that there are probably 50,000 businesses selling on the
Amazon platform with FBA (Fulfillment by Amazon) that are making $1 million or more per
year in revenues.

E-commerce roll-ups are the next wave of disruption in consumer packaged goods

“What happens when you get into that price range is that it gets hard to grow your business
and manage it,” he said, 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

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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.”

It realized quickly, though, that there was an opportunity to take that even further and make
that the business itself. And so Thrasio has been building a huge analytics engine that digs
into Amazon data and a lot more to determine which companies are interesting, how to help
them sell better, and eventually to conceive of even bigger businesses outside of the
Amazon ecosystem, covering other marketplaces, other sales channels and direct D2C
sales.

It hasn’t been the only one. Possibly spurred by Thrasio’s success, we’ve seen launches and
major funding for a plethora of these roll-up plays. Branded launched its own roll-up business
on $150 million in funding earlier this year, and others including Berlin Brands
Group, SellerX, Heyday, Heroes, Perch and more have collectively raised or committed from
their own balance sheets well over $1 billion in aid of their own efforts to buy up small but
promising third-party merchants.

With Amazon only getting bigger by the day, and the challenge of weeding out quality from
quite a lot of me-too knock-offs also growing, there is a clear role for improving
discoverability and connecting consumers to the most interesting products, and helping
those products succeed. At the same time, it will be worth watching how the roll-ups
themselves grow and if they manage to deliver on all that they are promising to the brands
they are buying, and to their investors.

Article corrected to note that the number of companies it has acquired are over 100, with
15,000 products among them, and that the company made $100 million in profit last year, not
revenues.

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