Thrasio has received capital and appointed a key executive as it prepares to scale in response to the growing number of start-ups whose primary business model is to help small businesses sell more of their products through Amazon’s Marketplace.
The company has scooped up $100 million and announced a new chief financial officer, retail industry veteran Bill Wafford. As it prepares for future initiatives, including a public stock offering. It has acquired and consolidated over 100 companies (and 15,000 products) retailing on Amazon. Thrasio’s Series C, which had previously closed at $260 million in July last year, has been extended by $100 million. This follows a $750 million infusion into the fund around six weeks earlier.
Thrasio made a profit of $100 million
Thrasio, which made a profit of $100 million on revenues of $500 million last year, is not announcing its valuation. Still, its co-founder and co-CEO, Josh Silberstein, says it is 50% higher than a month ago.
While reporting on the $750 million round, the company’s valuation might range from $3 billion to $4 billion. Although a debt round in January estimated the valuation to be about $3 billion, a spokeswoman would only tell them that it was “less than $10 billion” at the time. Including stock and loan financing, it has now amassed $1.85 million.
According to Silberstein, the latest $100 million comes from prior supporters who were disappointed with their share of the pie in the last financing round. Former investors include Oaktree Capital, Advent Venture Partners, Peak6 Capital, Western Technology Investment, and Seamless co-founder Jason Finger. As the company prepares for its next steps, which may include a public listing through a SPAC or a more traditional IPO route, it gives insiders a little more of a share.
Wafford – CFO at JC Penney
Wafford, who most recently served as CFO at JC Penney and before that as CFO of Vitamin Shoppe, is joining the team as CFO. His extensive CV also includes positions in finance at Walgreens and Target.
Longtime corporate employee Joe Falcao is being replaced by Wafford, who will take on the job of senior vice president (SVP) of finance and treasurer to expand the company’s treasury, tax, and foreign finance operations.
With over 15,000 products ranging from therapeutic sock makers to a company that has developed a spray to remove pet odors and stains to a high-end kitchen goods maker, Thrasio is essentially building in the online world what Wafford has done in the physical world with a variety of larger brick-and-mortar retailers that work with and partner with smaller brands across several categories from fashion to health and household goods.
Bill Wafford, Thrasio’s CFO, said in a statement that the company’s trajectory and the speed with which it has achieved growth are astounding. This is especially true given the company’s ability to adapt to market shifts over the past year. He’s relieved to have landed in a dynamic, collaborative environment that values exploration and flexibility. He is very excited to take on this position to help the company move into its next phase of expansion.
There are reportedly around 5 million third-party merchants on Amazon, and this figure is expected to increase tremendously, with over a million new sellers signing up in 2020 alone. Thrasio’s core belief is that even the most promising of these start-ups need more infrastructure to scale if and when its products become popular.
According to projections made by Silberstein and Thrasio, fifty thousand Amazon FBA (Fulfillment by Amazon) merchants are bringing in a million dollars in annual sales or more.
The margins will shrink, and earning a profit will be considerably more challenging as you scale up from $1 million to $10 million. They only noted that many successful businesses had hit a wall due to a need for more funding or an inability to sustain operations. They reasoned that if they bought 10–20 of them, they’d have the necessary scale to create a best-in-breed supply chain, marketing, etc., and solve the issue.
There is a prominent role in enhancing discoverability, and connecting consumers to the most exciting things. Helping those products flourish as Amazon continues to expand and the difficulty of distinguishing quality from a great deal of me-too knockoffs increases. Meanwhile, it will be interesting to see how the roll-ups develop and whether or not they live up to the lofty expectations set by the businesses they acquire and their investors.
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