According to the latest reports from foreign media, the well-known Amazon aggregator Benitago has recently filed for bankruptcy. It is worth noting that this giant just raised a huge sum of more than 300 million US dollars less than two years ago.
The New York-based Amazon aggregator sought protection from creditors in U.S. Bankruptcy Court in Manhattan on Wednesday, listing assets and liabilities ranging from $50 million to $100 million, according to people familiar with the matter. Tom Studebaker of consulting firm Porage Point Partners has been named Benitago’s chief restructuring officer.
It is understood that the company was founded in 2016 and its main business is to acquire small third-party sellers on the Amazon platform and operate them as a group.
Among them, many sellers will use Amazon's warehousing and distribution services. When they integrate the acquired small and medium-sized enterprises together, they will have better control over the pricing of products.
Benitago CEO and co-founder Santiago Nestares-Rampão said in a filing with the bankruptcy court that consumer preferences changed when quarantines ended in the late stages of the pandemic.
Since then, the company has experienced a rapid and dramatic reversal of fortunes due to macroeconomic factors, with the e-commerce industry shrinking significantly over the past two years and continuing to decline, Nestares said.
Court documents show that Benitago plans to restructure its debt and may sell part of its bankrupt business, including 15 branded stores and more than 300 products in categories including health supplements, office supplies and beauty products.
E-commerce research firm Marketplace Pulse said these aggregators have raised more than $16 billion in the past four years, much of it in 2021 and 2022.
In November 2021, Benitago said it had secured $325 million in funding led by tech venture capital and debt financing firm CoVenture.
At the time, Benitago already had dozens of brands covering hundreds of product categories. However, since the middle of last year, as the popularity of e-commerce has declined, the aggregator's acquisition business has also slowed down.
It is understood that Thrasio, one of Benitago's main competitors, announced layoffs in 2022, with the co-founder and chief financial officer leaving the company within a few months. Industry insiders said that Thrasio's situation triggered capital flight in the industry.
Business analytics firm CB Insights said in a May report that funding for Amazon brand aggregators fell 88% last year and only five funding deals were completed in the first five months of this year.
CB Insights said the market was “fragmenting” and some debt-ridden aggregators were putting investors at risk. Amazon Aggregators Bankruptcy |
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