SellerX raises $ 118 million to purchase and develop companies within the Amazon market


Like on Amazon The market continues to grow and mature. In the world of e-commerce, a new opportunity has arisen for a new generation of startups to consolidate the most promising of the smaller companies selling on the Amazon platform and build their own economies of scale within it. In the latest development, SellerX – a new company in Berlin – has completed a $ 118 million (€ 100 million) round aimed at bringing together smaller businesses that use Fullfilment by Amazon for payments, logistics and delivery of their products.

The round will be hosted by Cherry Ventures, Felix Capital and TriplePoint Capital with the participation of Village Global together with Zalando co-founder David Schneider, Shutterfly CEO and former CEO of Amazon UK, Chris North, and the founders of KW Commerce, a major Amazon seller from Germany (sales of cell phone accessories and household goods), also participating.

In particular, that $ 118 million is a starting round for the company, the first real money it has raised to date, and it is some equity but mostly debt that SellerX will use for acquisitions to execute its strategy. in the words of Malte Horeyseck (who founded the startup together with Philipp Triebel) to become “the digital Procter & Gamble”.

SellerX's focus will be on "evergreen consumer goods," said Triebel in areas such as household, pets, gardening supplies, children's goods and beauty. One acquisition has been made so far. and although it refused to tell me what it is, Horeyseck said that, along with other acquisitions it will make in the coming weeks, it will bring SellerX a turnover rate of € 20 million by the end of this year.

The horse has done well in the world of roll-ups in the Amazon market: in the past few months, a number of start-ups have launched large rounds of funding with sizeable portions of the debt to encourage consolidation in the most interesting smaller businesses, the sell and have their orders fulfilled by Amazon.

Just yesterday, another US player, Heyday, announced a $ 175 million round. Earlier this week, the London-based Heroes announced a $ 65 million round. Perch raised $ 123 million last month. Another big player in the field, Thrasio, was worth $ 1.25 billion in its own debt round earlier this year.

The opportunity is clear: the Amazon market has quickly become a major player in the world of e-commerce – a position that became even clearer this year during the Covid-19 global health pandemic that has spread to many people is a move away from in-person shopping, either at choice or on demand (for example, in the UK all "non-essential stores" are currently closed to in-person shopping) Last quarter, the company had sales of $ 98 billion and product sales of $ 52 billion. It is estimated that the number of market sellers was just over 50% of that number. According to Felix founder and investor Frederic Court, Amazon is already responsible for 50% of all online retail.

"It's the new main street," he said in an interview.

At the same time, the concept of "D2C" has evolved, whereby companies bypass traditional retailers and build their own brands to sell their own unique products on their own terms. Amazon played a major role in this. Just as a writer can now publish himself on Amazon and bypass book deals, you can list your products on Amazon and theoretically get access to a large audience of buyers without having to showcase your goods to a buyer who may or may not be bidding.

On the downside, however, you have tremendous fragmentation on the platform. As Amazon grows in popularity, it is more difficult than ever for individual sellers to see themselves or differentiate themselves once they are found.

There's a lot of junk being sold on Amazon too – there's an entire industry of those buying wholesale sites and reselling them on Amazon, which is one reason why so many merchants seem to be selling identical anonymous products.

It is almost impossible for the humble shopper to separate the wheat from the chaff – not least because of the persistent problems Amazon has had with the integrity of its rating system and the sale of dubious products (it worked hard to try) and fight them all this, but it still remains a problem).

This leads to a challenging landscape on Amazon that is sometimes not held together by their Prime delivery promises and the fact that you can usually still find something that meets your needs, not because the goods are great, but because they are so big are an everything shop.

Horeyseck said the idea behind SellerX (and hopefully its many competitors) is not to find the most successful companies of all, regardless of how they get there. Rather, their mission is to build a thriving business by focusing on the more interesting sellers who are legitimately doing well and using the Amazon framework to do so. However, they may lack the capital, expertise, or appetite to stay with their companies longer. The idea is to record these and use SellerX's own analyzes and processes as well as the production relationships it has established to record these seedlings and grow them into trees.

Horeyseck believes that this can ultimately be a win-win situation for all parties, for SellerX, the smaller retailer, and Amazon itself.

"I think basically anything we do will help Amazon have a better quality market," he said. “This is about creating strong D2C brands that will give you quality every time. Amazon now needs that in its market. "

Filip Dames, founding partner of Cherry Ventures, said in a statement, “The diverse seller landscape at Amazon offers a unique opportunity to acquire some category-winning, highly profitable products, empower them with technology and incorporate them into next-generation consumer brands. The founders Malte and Philipp combine decades of e-commerce and buy-and-build know-how, which enables them to take advantage of this opportunity in a unique way. "