Investors, Desperately Looking for Next Hit Product on Amazon

A sizzling competition is taking place among Wall Street-backed investors looking for the hottest small brands selling their products on Amazon Inc (N...
Investors, Desperately Looking for Next Hit Product on Amazon
Image credit: justynafaliszek / Pixabay via Valuewalk

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This story originally appeared on ValueWalk

A sizzling competition is taking place among Wall Street-backed investors looking for the hottest small brands selling their products on Amazon Inc (NASDAQ:AMZN). Start-ups known as “aggregators” are, according to Bloomberg, betting on transforming these products into global brands.

 

Q2 2021 hedge fund letters, conferences and more

Marketplace Businesses to Scale Online

During the COVID-19 pandemic, small sellers have found on Amazon the perfect showcase to sell their products to thousands of people, with many of them becoming millionaires thanks to smart strategies or simply by selling their businesses to larger .

Michelle Venton in the U.K. began selling gifts that parents could buy at the last minute to give to their children. The idea was a success and the business exploded. By 2020 she was selling the company for a mouthwatering value.

According to Marketplace Pulse, since April 2020, over 60 of the Wall Street aggregators have raised almost $6 billion. “As the market heats up, their challenge is to find up-and-coming brands with staying power and avoid overpaying for them.”

For Helen Vaid, former Pizza Hut’s chief customer officer and now CEO of Foundry, “Amazon is the point of departure, not the point of arrival.”

Aggregator Start-ups on the Hunt

Foundry is one of the most recent additions to the aggregators’ squad, recently announcing a whopping $100 million in funding from private-equity firms LightBay Capital and Monogram Capital Partners, both based in Los Angeles.

The company, with former Amazon Stefan Haney and ex-Pizza Hut Helen Vaid in its line-up, is aiming at being the top choice when up-and-coming Amazon brands scour for partners to boost their businesses.

Similarly, in Europe, factory14 raised $200 million in May to jump into the online snap-up bandwagon, and with this bulky wallet they are set to help promising Amazon brands to consolidate and scale their sales.

Inspired by U.S. company Thrasio, the European ace is set to dabble into the roll-up space consisting of more than “50,000 businesses selling on Amazon via FBA, making $1 million or more per year in revenues,” as informed by TechCrunch.

Thrasio itself couped $100 million in their Series C extension in April, and appointed retail veteran Bill Wafford as its CFO with already an eye on a public listing. The company saw a $750 million injection in February, after a $260 million one in July 2020.

Amazon is part of the Entrepreneur Index, which tracks 60 of the largest publicly traded companies managed by their founders or their founders’ families.

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