Another Bad Year for Amazon Aggregators

2023 was bad for Amazon aggregator funding, and this year is on track to be even worse.

Just two equity funding rounds were closed through June 27, compared to five at the same time last year and 12 in all of 2023.

“The decline in funding reflects the overall venture environment, where funding has slowed across industries. For Amazon aggregators in particular, the biggest and most well-known player, Thrasio, prepared for bankruptcy in late 2023 as the overall slowdown in ecommerce sales growth slowed funding to the space as well,” Laura Kennedy, principal analyst at CB Insights, said in a written statement to Practical Ecommerce. “These aggregator companies still exist and are making acquisitions, but overall the market has flatlined.”

Thrasio announced last week that it had emerged from Chapter 11 bankruptcy and promoted Chief Operating Officer Stephanie Fox to CEO and a director of the company, effective immediately. CEO Greg Greeley had been expected to step down following the restructuring.

“The revitalized Thrasio will prioritize its top-performing brands with a focus on profitability as a consumer goods company,” Thrasio said in a press release.

Thrasio, based in Walpole, Mass., filed for Chapter 11 bankruptcy protection in a New Jersey court in February. It requested that the court oversee a restructuring agreement with lenders, allowing it to cut about $495 million in debt and defer interest payments for a year after exiting bankruptcy.

“The restructuring has left Thrasio financially stronger, with a clean balance sheet, reduced debt, and an infusion of $90 million in fresh capital,” the company said.

Thrasio will concentrate on its leading brands with a loyal customer base and potential for product and channel expansion, the company said, including The Hate Stains Co. stain removers, which has grown over 100% in the last year, and Angry Orange pet deodorizer, which has achieved 21 times top-line growth since being acquired in 2018.

“We are emerging from Chapter 11 with a clean balance sheet, fresh capital, and a renewed focus on our core business of building brands,” Fox said. “I have been with Thrasio since day one and remain as excited about the opportunity ahead now as I was in 2018.”

The ecommerce landscape, however, has changed with China’s Temu and Shein taking an ever-increasing share of the market with cheap goods.

In 2021, Amazon brand acquirers spent more than $6 billion in acquisitions amid the pandemic stay-at-home frenzy that pushed ecommerce demand through the roof. So far this year, aggregators have spent $100 million.

“I have to imagine the growth at Temu and Shein has not helped the aggregator market, as the idea of an inexpensive online ‘brand’ becomes even less important in that environment focused on the lowest price possible (and now Amazon is going to start its own direct-from-China product marketplace as well),” CB Insight’s Kennedy said.