Elevate Brands raises $67.5 million, plans to acquire 100 Amazon brands by next year

In recent years, there has been an endless stream of companies focusing on acquiring third-party sellers’ stores on Amazon. Take Thrasio , which was founded in 2018, as an example. The company has currently raised more than US$1.75 billion in funds and acquired nearly 100 Amazon brand stores, turning Amazon’s e-commerce empire into a “corporate procurement market” for capital.

The reason is that the profits and growth space behind Amazon's third-party stores are the primary factors that attract capital.

Data shows that Amazon's third-party seller market is a high-growth market with a valuation of up to $300 billion, and its size is expected to double in the next five years. In addition, research by ChannelAdvisor and Dynata shows that more than half (53%) of American consumers begin searching for products on Amazon, more than twice the proportion of users who search for products through search engines. Moreover, in 2020 alone, more than 300,000 new sellers joined Amazon, with an average of 3,700 new businesses launched on the platform every day.

Therefore, the Amazon e-commerce platform itself is what makes these brands so attractive to investors. The platform itself is a "testing ground." Elevate Brands , which will be mentioned below, is a fierce player in this wave of Amazon store acquisitions.

According to foreign media reports, Elevate Brands, a leader in acquiring and operating Amazon's third-party business, has raised an additional $12.5 million this month to promote the company's acquisition plan after completing its $55 million financing in February this year. So far, Elevate Brands has completed a total financing of $67.5 million this year.

Moreover, Elevate Brands has completed the acquisition of its 20th Amazon third-party seller this month, and the company aims to acquire 100 leading Amazon brands in specific categories by the end of next year.

Founded in 2016 and headquartered in New York and Austin, Texas, Elevate Brands specializes in acquiring, launching, and operating consumer Amazon brands, as the company's name suggests: "Elevate Brands." Its founders have previously successfully created their own brands on Amazon, so they have rich practical experience.

( Elevate Brands official website)

The company is said to provide Amazon third-party sellers with a clear and attractive exit plan from the Amazon platform with fair and transparent valuations. The acquisition process is data-driven and can quickly complete the underwriting process within 30 days, and then use its global network to provide new brands with the ability to quickly expand and achieve sustainable growth.

Elevate Brands reports an average post-acquisition growth rate of 200% across its entire portfolio, acquiring an average of 3-4 new brands per month, and expects to achieve more than $150 million in revenue by the end of 2021.

However, Richard Kestenbaum , a partner and expert at Triangle Capital , expressed concerns about the long-term prospects of such companies that specialize in acquiring Amazon's third-party sellers. He believes that the growth rate of the e-commerce market has been slowing down and will eventually slow down. When Amazon's own business revenue reaches its peak, Amazon will look for other ways to make money, including raising fees or reducing sellers' profits. He said: "Unless the brand is well-known, Amazon will control it. When Amazon controls its relationship with consumers, Amazon will ultimately make a profit."

For a company like Elevate Brands, the acquisition plan is focused on expanding the success of third-party brands on Amazon, and the third-party market on the Amazon platform will exist for a long time, and Amazon will continue to maintain its dominance in the process.

Therefore, one way to solve this problem is to diversify beyond the Amazon platform, including building your own DTC sales channel , but no company that has acquired Amazon's third-party brands has done this yet.

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