E-commerce roll-ups and the rise of Thrasio biz model

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👋 I’m Zoe: built 11+ MVPs, product/market advisor, and curious about innovation. Each week at Venturescale, I unpack new insights on profitable markets and how these businesses operate & monetize — at the intersection of Internet platforms and consumer tech.

Today’s post is about e-commerce acquisition platforms. Read here if you’re interested in the Web3 creators economy, future of social networks, FinTech & wellness tech, or B2C online marketplaces.

The rise of e-commerce roll-ups

In the past, roll-ups were mainly proceeded by private equity firms, large conglomerates, and institutional buyers whereby companies acquire businesses in the same market and merging them under a single entity to scale.

Today, there are new companies that consolidate independent private label brands with decent revenue. They are the aggregators of e-commerce brands. Unlike marketplaces that connect buyers and sellers to acquire or sell off their brands (e.g. Flippa and Exchange Marketplace by Shopify), roll-up platforms are operational and resourceful. They:

  • have a thesis around e-commerce product categories they want to acquire
  • search across marketplaces like Amazon and Shopify
  • find winners and merge these companies
  • operate like a private equity firm, may fund and invest in buyout businesses
  • platform-agnostic or vertical-focused
  • grow them collectively using built-in technology, infrastructure, data analytics, operational expertise, capital, and economies of scale
  • (📥 Full version) 3 more specific strategies on how aggregators operate and scale

Key players around the world

  • Amazon-focused aggregators: Thrasio (made $100 million in profits, acquired more than 100+ brands), Heyday, Perch, and Branded
  • Shopify aggregator: OpenStore
  • Home living & consumer electronics roll-up: Berlin Brands Group
  • Asia-Pacific focused consolidator: Una Brands (raised US$40 million) targets acquisition on Tokopedia, Lazada, Shopee, and Rakuten using a platform-agnostic approach by focusing on Shopify, Magento, or WooCommerce.
  • (📥 Full version) 1 more company that focuses on the Amazon platform
  • (📥 Full version) 5 more companies from emerging market

👉 Download full report

What problems do they solve?

  • Not being able to find ideal buyers ➝ help sellers get acquired. Roll-up platforms help successful e-commerce merchants or direct-to-consumer (D2C) brands to exit their businesses lucratively.
  • (📥 Full version) 3 more valid problems they are solving that actually make these platforms super profitable. You’ll also learn:
  • how do roll-up platforms create values for their clients?
  • what are the user pain points in getting a business acquired?
  • how do they tackle complexities in selling off businesses?

Business models

Roll-up companies are running the business using a private-equity model. They act like collaborators, operators, and venture capitalists (VC) at the same time. For example:

  • Thrasio acquires third-party sellers on Amazon focusing on everyday consumer brands, scale the business, and offer exit options for the sellers. In 2020, Thrasio profits $100 million on $500 million in revenues.
  • Heyday provides tech stack, capital, advice, and insights to help consumer product brands accelerate the next level of growth.
  • (📥 Full version) 2 more specific ways to monetize as e-commerce aggregators. You’ll also learn:
  • different ways to partner with potential acquisition targets
  • different ways to expand your roll-up portfolio

Why now?

As e-commerce entrepreneurship is exploding, there will be more successful independent merchants who will need to find a way to exit their brands. Here is the market potential snapshot:

  • Growing numbers of independent sellers. In 2020, more than 50% of Amazon’s gross merchandise volume (GMV) was coming from third-party, independent sellers.
  • (📥 Full version) 3 more market evidence in detail to help you answer the “why now” questions for your investors or partners. You’ll also learn:
  • insight from Amazon financial statement
  • impact of D2C brands
  • insight from the emerging e-commerce markets and why there are untapped opportunities to monetize

Business opportunities

  • (📥 Full version) 4 specific product ideas and business opportunities that are solving problems. You’ll unlock:
  • one specific product idea in SaaS
  • one vertical-focused roll-up platform idea
  • a solution to help aggregators find the next acquisition winner
  • specific business idea to participate in a roll-up partnership

👉 Download full report

Get the full report:

  • 🔺 3 more specific strategies on how aggregators operate and scale
  • 📝 6 more new market players
  • 🧐 3 more valid problems they are solving that actually make these platforms super profitable
  • 🖍 3 more market evidence in detail to help you answer the “why now” questions for your investors
  • 🚀 4 specific product ideas and business opportunities that are solving problems

What you’ll unlock:

  • 🌟 how do roll-up platforms create values for their clients?
  • 😭 what are the user pain points in getting a business acquired?
  • 💦 how do they tackle complexities in selling off businesses?
  • 🙌 different ways to partner with potential acquisition targets
  • 💪 different ways to expand your roll-up portfolio
  • 🧠 insight from Amazon financial statement
  • 🚚 impact of D2C brands
  • 🎁 insight from the emerging e-commerce markets and why there are untapped opportunities to monetize
  • 💻 one specific product idea in SaaS
  • 🥳 one vertical-focused roll-up platform idea
  • 🎖 a solution to help aggregators find the next acquisition winner
  • 👍 specific business idea to participate in a roll-up partnership

👉 Download full report :

Built 11+ MVPs with rapid validation. Founder: Venturescale.to Analyzing Consumer Tech & Platforms. Product/Market advisor US/APAC 👉About me: whizzoe.com