An era has come to an end, and Amazon’s leading player has declared bankruptcy!

The Amazon store acquisition industry, which was once highly sought after by investors and occupied the front pages of major news, has now gradually faded from people's sight. In the context of the overall downturn in Amazon's environment, Amazon's store acquisition business has suffered a disastrous defeat.

Recently, there has been another wave of turmoil in Amazon’s acquisition circle. Following several aggregators, Amazon’s largest brand aggregator Thrasio has also decided to file for bankruptcy!

It is a pity that the once prosperous leading enterprise fell from the top of the industry to the bottom in just a few years.

Amazon's largest aggregator Thrasio files for bankruptcy

It is understood that Thrasio was founded in 2018. At that time, the e-commerce business of Amazon's third-party sellers continued to grow, and entrepreneurs represented by Chinese sellers entered Amazon in large numbers. With the help of Amazon's platform, the sellers' brand building cycle was greatly shortened.

In 2020, the outbreak of the new coronavirus pandemic and the obstruction of offline business led to explosive growth in e-commerce in North America. The stocks of mainstream cross-border e-commerce platforms soared across the board, and the Amazon brand naturally became the object of hot pursuit in the capital market.

In the eyes of capital, brands on the Amazon platform have both "brand premium", cash flow, and "sustainable growth". With the support of such concepts, a large number of Amazon aggregator companies have been spawned, and Thrasio is one of the best.

In July 2020, Thrasio completed its Series C financing led by Advent International. Within just two years of its founding, the company’s valuation had reached $1 billion, setting a new record for US unicorns. After completing a $1 billion Series D financing in October 2021, its valuation skyrocketed to $10 billion, making Thrasio the fastest startup in the US to reach a market value of $10 billion.

After that, Thrasio made rapid progress with a frequency of 1.5 acquisitions per week, and even considered going public through SPAC.

However, with the end of the epidemic, the growth rate of e-commerce consumption in Europe and the United States began to return to normal levels, and Thrasio's bubble began to gradually burst.

In 2022, the company went through what was described as widespread layoffs and a change in management, including the CEO. The company said in the memo that it had "decided to reduce the size of the Thrasio team" and make certain "strategic and operational changes."

Last year, The Wall Street Journal reported that Thrasio was actively exploring restructuring options to address its financial problems and had begun discussing various solutions with advisers and lawyers, including the possibility of filing for bankruptcy.

Despite trying every possible means, the outcome of bankruptcy protection could not be avoided. On February 28, 2024, Thrasio, Amazon's largest brand aggregator, filed for bankruptcy protection in a New Jersey court under Chapter 11 of the U.S. Bankruptcy Code.

The company expects assets to be between $1 billion and $10 billion and liabilities to be between $500 million and $1 billion, according to a filing in New Jersey Bankruptcy Court. The company filed for Chapter 11 bankruptcy protection and received commitments for $90 million in new financing from existing shareholders.

Thrasio will continue to operate its business throughout the bankruptcy process and expects to pay off its substantial debts. Thrasio said the $90 million emergency financing "is expected to provide sufficient liquidity to support the company throughout the process and enable the continued operation of Thrasio's brands."

Thrasio's CEO Greg Greeley once said that Thrasio is one of the largest third-party sellers on the entire Amazon platform, and that products from several of its brands have been included in Amazon's small category BS list. Logically, there is no problem with its profitability.

Eventually, it went bankrupt. Some industry insiders believe that there were many problems within the company. First, in order to expand rapidly, Thrasio acquired many brands at a high premium, which increased its financial burden. Second, in order to meet the rapidly growing demand, Thrasio stockpiled a large amount of inventory, which caused a serious backlog of inventory and led to a tight capital chain. Finally, the global supply chain disruption in the past two years also severely impacted Thrasio's profitability.

The combination of multiple factors eventually led to Thrasio's bankruptcy, but before that, the Amazon aggregator industry had already undergone tremendous changes.

The aggregator industry is in turmoil, with small and medium-sized aggregators going bankrupt and being sued constantly

According to Marketplace Pulse, Amazon brand acquisition services attracted more than $16 billion in funding in 2021. However, this number has dropped significantly in the past two years.

It can be seen that investors are becoming more cautious about investing in Amazon aggregators. In addition to Thrasio, some smaller aggregators could not hold on as early as the middle of last year.

It is understood that one of Thrasio’s main competitors, Benitago Group, officially filed for bankruptcy in August last year. This was the seventh year of the company’s establishment and two years after it raised $325 million in new funds.

Benitago co-founder and CEO Santiago Nestares Lampo said in a filing with the bankruptcy court that consumer preferences changed when quarantine ended in the late stages of the pandemic.

Since then, Benitago has experienced a rapid and dramatic reversal of fortunes due to macroeconomic factors .

In addition to Benitago, several other Amazon aggregators are also having a hard time.

Last September, Amazon aggregator Acquco was sued by lenders in the New York Supreme Court for defaulting on loans. In 2022, aggregator SellerX was sued for failing to fulfill a contract with a brand and failing to promote a brand it acquired.

In addition, mutual acquisitions and mergers between Amazon aggregators have become a new trend. At the beginning of last year, two US aggregators, Suma and D1 Brands, merged, and the merged company is now called Ambr Group. In April last year, Razor Group acquired German aggregator Stryze. In May last year, SellerX acquired the US aggregator Elevate Brands. The acquired brand portfolio includes more than 80 Amazon-owned consumer brands in the fields of sports and outdoor, home kitchen, mobile accessories, pets and consumer products.

Now, Thrasio, Amazon’s largest brand aggregator, has also declared bankruptcy, which is bound to have a far-reaching impact on aggregators and the entire Amazon industry.

On the one hand, as one of the largest third-party sellers on the Amazon platform, Thrasio's bankruptcy will lead to a reduction in the number of sellers on the Amazon platform and possible changes in the competitive landscape. It is also a question worthy of attention as to where its high-quality brand assets will eventually go.

On the other hand, Thrasio's bankruptcy filing as a leading aggregator will serve as a warning to other brand aggregators. In the future, they will become more cautious in expansion and operation, and the capital market's attitude towards the aggregator industry may also become more cautious.

For sellers, they can pay proper attention to the high-quality brands under Thrasio. If they are really resold at a low price in the future, they may consider taking over these brands.

Amazon

Aggregators

Bankruptcy