Future consumer-focused conglomerates could be built on digital marketplace infrastructure.
Small and big merchants (i.e. third-party sellers) on Amazon's ecosystem generated $300 billion in 2020, up 50% from 2019, according to Marketplace Pulse. A report from Amazon on seller performance in the last 12 months, showed that 27K US sellers had more than $500K in sales, with nearly 15% of those topping $1 million in sales for the first time. Now that they've reached such a scale, the question remains whether they have the operational expertise to grow further. Ecommerce aggregators see an opportunity in this area, and so do investors such as Silver Lake, SoftBank and Bain Capital, among others.
Buyers of third-party Amazon sellers and direct-to-consumer (D2C) brands have raised $9.3 billion in equity and debt in 2021 alone, an 8.3x increase versus 2020. Looking back, the category was non-existent in 2018 and in 2019 it attracted a mere $43 million in VC investment.
Thrasio, the pioneer and leader of the category, raised $1.0 billion in all-equity Series D last week to enter the Indian ecommerce market. Thrasio has acquired 120+ Amazon brands since 2018 in US, UK, Germany, China, and Japan. However, India is the 8th largest ecommerce market globally and is expected to grow at 14% CAGR til 2024. In India, Amazon has 850K+ sellers and Flipkart has 375K+ sellers. It is a suitable market for Thrasio and companies alike. Also, mom-and-pop shops, the acquisition targets for companies like Thrasio, make up 88% of India's $850 billion retail market. Amazon has initiatives to integrate Karanas (Indian mom-and-pop shops) into its ecommerce platform.
In addition to Thrasio, there are now 70+ ecommerce aggregators, including 3 unicorns. Find out the Unilevers and Procter & Gambles of the digital age.
🇨🇳 T3, China-based ride-hailing company, raised $1.2 billion Series A. T3 has 54 million registered users which pales in comparison to Didi's 377 million active users. Didi, one of China's most valuable marketplaces, has been under Chinese regulator scrutiny since July this year. T3's Series A is one of the largest mobility deals in China. Investors bet T3 could grab market share from Didi. Having the state-backed Citic Group as the lead investor could help T3 stay away from regulatory pressure.
🇺🇸 Stride Health, a SF-based health insurance comparison platform, secured $47 million Series C funding. Stride Health partners with gig economy companies such as Uber, DoorDash, Instacart and Gopuff to provide portable benefits to their independent workers. With 59 million of American freelancing, or 36% of the total workforce, Stride has a massive potential customer base.
🇧🇷 EmCasa, a Rio de Janeiro-based home search platform, raised $19.5 million at $105 million valuation. In 2020, EmCasa doubled its revenues to $3.2 million (BRL 18 million) and is expected to hit $8.8 million (BRL 50 million) in 2021. The company offers virtual tour and remote visits to its listed properties.
Other notable marketplace deals from the last week:
🇮🇳 Acko General Insurance, an India-based digital insurance platform, raised $255 million at $1.1 billion valuation, becoming the latest unicorn in the country.
🇫🇷 YouStock, a French transportation and storage platform, raised €3.7 million to speed up its development.
🇬🇧 Supper, a London-based Michelin-starred meal delivery app, raised £2.4 million to accelerate expansion.
📱 Snap, Facebook, Twitter and YouTube lose nearly $10bn after iPhone privacy changes via Financial Times.
👟 Allbirds, a US-based eco-friendly wool sneakers company, reportedly targets a $2.2 billion valuation in its IPO later this year. The company is unprofitable.
🎧 The Creator Economy: An Interview with Rally.io CEO Bremner Morris via Speedinvest.
👕 Uber, Bed Bath & Beyond Partner to Deliver Baby and Kids’ Clothing via PYMNTS.
🏡 Zillow Quits Home-Flipping Business, Cites Inability to Forecast Prices via WSJ.
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Tip of the week
The number of new private marketplace unicorns in 2021 has reached 96. This means almost 10 new startups reaching unicorn status every month! Collectively, those 96 startups are worth €171 billion. Fintech is leading the way with 25 new unicorns, followed by Food (11) and Fashion (10). Explore the 96 startups in landscape view. Click on the industry label on the landscape view to filter for new unicorns by industry (e.g. Food).
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