money Thrasio, which buys up Amazon third-party sellers, has rapidly raised $1.75 billion
Less than one month after announcing $500 million in debt financing that reportedly valued the company at $3 billion, Thrasio, which acquires Amazon sellers and improves their operations, has raised another $750 million, the company announced on Yahoo Finance Live on Tuesday.
The Massachusetts-based startup has held seven fundraises in a little over one year, and has now raised $1.75 billion to date. In 2020, Thrasio saw $100 million in profit from sales of more than $500 million. The company claims it is the fastest U.S. startup to reach profitable unicorn status.
The feverish pace of its funding matches the pace of its M&A activity. Thrasio has now bought more than 90 FBA (Fulfillment By Amazon) brands that sell a combined 15,000 different products, from air purifiers to car wheel cleaners to driveway alarms to resistance exercise bands. The company targets brands with $1 million to $10 million in annual sales, and says that its brands typically see a 30% increase in sales two months after Thrasio acquires them.
So, what’s the secret sauce? It sounds like Thrasio’s answer is its staff size (more than 700 employees) and its marketing budget.
“If you’re somebody who’s been able to build a couple-of-million-dollars business, there comes a day when you realize you need to manage a global supply chain, and a massive marketing effort, and your own creative team, and your operations, and your legal effort,” says Thrasio co-CEO Josh Silberstein. “And the level of complexity required to do all of those things well at the same time is not the sort of thing that you can do with a three-person team. There comes a point structurally in the evolution of those businesses when the way in which you succeed is not by being a really scrappy or thoughtful entrepreneur, but by being a complete service, by being able to do all the things well.”
Thrasio’s website touts its use of a long list of data points (like conversion rates, keyword results, freight costs, and category trends) to beef up a brand’s operations and boost sales growth: “We don’t optimize, we mastermind.”
Of course, Amazon’s treatment of third-party sellers on its platform has been the subject of scrutiny for years. The company has launched dozens of in-house brands—which don’t typically have names that make it clear they are Amazon brands—that have quietly come to dominate product search results and crowd out non-Amazon brand names. And many third-party sellers have accused Amazon of using their own sales data to create Amazon generic brands that crush them.
Thrasio is one of many companies that have built large businesses entirely off the back of the Amazon FBA system and its complexities for entrepreneurs.
For now, Thrasio isn’t a name consumers know; it’s the man behind the curtain of the brands it buys. But amid its rapid growth, it has aims to become more of a consumer-facing name. (Think of Fanatics, which powers the online apparel stores for all the major sports leagues, and only recently became more of an apparel brand name in its own right.)
“It’s actually very difficult to change the brand name on an Amazon brand without resetting a lot of its SEO aspects, we really can’t just rename something Thrasio,” Silberstein says. “Having said that, we expect to begin to introduce Thrasio as a consumer brand over the course of the next year.”
Along with that aim, Silberstein says the company, which has focused on acquiring brands with under $10 million in revenue, is now “in a position to buy a business with $200 million to $400 million in revenue.”
Given its size and funding, don’t be surprised if a Thrasio IPO is on the way later this year.
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Daniel Roberts is an editor-at-large at Yahoo Finance and closely covers tech. Follow him on Twitter at @readDanwrite.
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