We don’t see ourselves as the next P&G, but a new version of it, building microchampions in micromarkets, identifying underpriced digital real estate. “We want to transform what we see as the levers of business operations in this space. “It’s perfectly acceptable to build an FBA-based business, but at some point you can move beyond that,” Ahluwalia said in an interview. Thrasio has in the past estimated to me that there are probably 50,000 businesses selling on Amazon via FBA making $1 million or more per year in revenues. It’s a big opportunity. By one estimate there are about 5 million third-party sellers on Amazon today, and their ranks are growing exponentially, with more than 1 million sellers joining the platform in 2020 alone. But Razor believes its point of differentiation is its focus on technology to improve its responsiveness to the market, both when it comes to identifying and buying brands, and then growing them. Indeed, there are, as you might have seen, a lot of others in the market pursuing the “FBA rollup” model - consolidating businesses that have been built on the back of Fulfillment by Amazon, with the pitch being they can apply more sophisticated economies of scale, analytics and management to grow great cottage industries into high rises, so to speak.
Assuming the debt capital it’s now raised is put to use, Ahluwalia believes Razor Group will cross $480 million (€400 million) in sales in the next 12 to 15 months.Īs a point of comparison, Thrasio, one of the older players in this current market, was founded in 2018 and has 100 brands in its stable. Founded in August 2020, in the last eight months, CEO Tushar Ahluwalia said the startup has grown to 107 employees across four offices and is currently on track to cross $120 million (€100 million) in sales from the 30 brands it has already amassed in its stable in categories like personal wellness, sports and home and living.
Razor Group itself is not even a year old but has been building out its business at a fast pace.
The market remains very hot for startups building e-commerce empires by consolidating independent third-party merchants that have gained traction on Amazon’s Marketplace, and in the latest development, Razor Group - a Berlin-based startup buying up promising Amazon sellers and scaling them into bigger, multichannel businesses - has closed financing of $400 million to scale its own efforts in the space.Īround $25 million is coming in the form of equity to grow its business and $375 million is in debt to make acquisitions, with target businesses typically already pulling in between $1 million and $15 million in annual revenues.
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