Perch acquires Web Deals Direct for $100M+ to boost to its Amazon roll-up play


Image Credits: Web Deals Direct (opens in a new window)

On the heels of raising $775 million earlier this year, Perch has made a big acquisition that will bring on a number of new brands and operations infrastructure to enhance its position in the race to roll up smaller merchants that sell and fulfill sales through Amazon. The company has acquired Web Deals Direct, an Amazon seller that owns 30 brands of its own (pulling in $80 million in revenue annually) and also operates its own warehouse.

Terms of the deal are not being disclosed but I understand from sources that it was a nine-figure deal valued between $100 million and $200 million.

There are millions of merchants currently on Amazon’s marketplace, leveraging the e-commerce giant’s storefront, search tools, fulfillment infrastructure, payment tools, warehouses and delivery network to sell products to buyers.

Companies like Perch compete against the likes of Elevate Brands (which yesterday announced $250 million in funding), Thrasio, Heyday, SellerX, Branded, Razor Group and many others that are seizing an opportunity to snap up and roll up the more successful of these to bring better economies of scale into the model, while also building technology to better measure and leverage sales analytics and more.

Elevate Brands banks $250M to roll up third-party merchants selling on Amazon’s marketplace

While these companies are, essentially, acting as marketplace consolidators, this latest acquisition is significant because, in a sense, it underscores an interesting shift toward a consolidation of the consolidators themselves.

WDD’s categories span home goods, sports, arts and crafts, pet supplies and office products, and Perch’s VP of acquisitions, Nate Jackson, said Perch was interested in them because they are one of the more successful Amazon merchants. In a market where visibility is based on how well engaged previous buyers are with your products, WDD has picked up some 110,000 reviews and 2.3 million customers.

For WDD the idea is that joining Perch will give it more reach in terms of targeting more customers, and to bring it better analytics leveraging insights and sales from Perch’s other brands, which currently number at around 70 and cover the same categories.

“We took our business from zero to $80 million in sales in 5 short years,” said Adam Feinberg, CEO of Web Deals Direct, in a statement. “But, with Perch, who are proven eCommerce operators, we think the possibilities of growth in the next 5 years are just as exciting. I’ve been so impressed with the caliber of their team, and I trust their long-term vision to steward our business into the next phase of growth. This was a complex deal, but Perch has made the process fair and transparent. I want to thank all of the great Web Deals Direct team members for the organization we’ve built together; our employees could not be in better hands with Perch.”

It’s also a signal of what the next steps might be for these roll-up companies, with Perch gaining a 230,000-square-foot warehouse in California and now looking to get more warehouse space on the East Coast. While Amazon might still be an important storefront for visibility, it’s a sign of how these companies may be looking at taking on more of the process themselves on the fulfillment side to grow margins.

E-commerce roll-ups are the next wave of disruption in consumer packaged goods

“This deal marks a major milestone for Perch,” said Perch founder and CEO Chris Bell, in a statement. “The complexity and size of the business is a testament to the excellent organization Adam and the entire team at Web Deals Direct have built, and it is a pleasure to work with such inspirational entrepreneurs.”

This is not a completely new area for Perch, and perhaps the writing has always been on the wall that it would eventually bring more fulfillment into its own e-commerce operations to lessen some of the reliance on Amazon.

Before founding Perch, Bell and Perch’s COO designed and built the Wayfair Delivery Network for online furniture company Wayfair — a service that handled 3 million “heavy bulky orders” annually, and did so with a view to speeding up the turnaround time, turning what typically takes a month to deliver into a two-day process. That will be some of what the team now hopes to bring to Perch, it seems.

More TechCrunch

When the founders of Sagetap, Sahil Khanna and Kevin Hughes, started working at early-stage enterprise software startups, they were surprised to find that the companies they worked at were trying…

Deal Dive: Sagetap looks to bring enterprise software sales into the 21st century

Keeping up with an industry as fast-moving as AI is a tall order. So until an AI can do it for you, here’s a handy roundup of recent stories in the world…

This Week in AI: OpenAI moves away from safety

After Apple loosened its App Store guidelines to permit game emulators, the retro game emulator Delta — an app 10 years in the making — hit the top of the…

Adobe comes after indie game emulator Delta for copying its logo

Meta is once again taking on its competitors by developing a feature that borrows concepts from others — in this case, BeReal and Snapchat. The company is developing a feature…

Meta’s latest experiment borrows from BeReal’s and Snapchat’s core ideas

Welcome to Startups Weekly! We’ve been drowning in AI news this week, with Google’s I/O setting the pace. And Elon Musk rages against the machine.

Startups Weekly: It’s the dawning of the age of AI — plus,  Musk is raging against the machine

IndieBio’s Bay Area incubator is about to debut its 15th cohort of biotech startups. We took special note of a few, which were making some major, bordering on ludicrous, claims…

IndieBio’s SF incubator lineup is making some wild biotech promises

YouTube TV has announced that its multiview feature for watching four streams at once is now available on Android phones and tablets. The Android launch comes two months after YouTube…

YouTube TV’s ‘multiview’ feature is now available on Android phones and tablets

Featured Article

Two Santa Cruz students uncover security bug that could let millions do their laundry for free

CSC ServiceWorks provides laundry machines to thousands of residential homes and universities, but the company ignored requests to fix a security bug.

23 hours ago
Two Santa Cruz students uncover security bug that could let millions do their laundry for free

OpenAI’s Superalignment team, responsible for developing ways to govern and steer “superintelligent” AI systems, was promised 20% of the company’s compute resources, according to a person from that team. But…

OpenAI created a team to control ‘superintelligent’ AI — then let it wither, source says

TechCrunch Disrupt 2024 is just around the corner, and the buzz is palpable. But what if we told you there’s a chance for you to not just attend, but also…

Harness the TechCrunch Effect: Host a Side Event at Disrupt 2024

Decks are all about telling a compelling story and Goodcarbon does a good job on that front. But there’s important information missing too.

Pitch Deck Teardown: Goodcarbon’s $5.5M seed deck

Slack is making it difficult for its customers if they want the company to stop using its data for model training.

Slack under attack over sneaky AI training policy

A Texas-based company that provides health insurance and benefit plans disclosed a data breach affecting almost 2.5 million people, some of whom had their Social Security number stolen. WebTPA said…

Healthcare company WebTPA discloses breach affecting 2.5 million people

Featured Article

Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Microsoft won’t be facing antitrust scrutiny in the U.K. over its recent investment into French AI startup Mistral AI.

1 day ago
Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Ember has partnered with HSBC in the U.K. so that the bank’s business customers can access Ember’s services from their online accounts.

Embedded finance is still trendy as accounting automation startup Ember partners with HSBC UK

Kudos uses AI to figure out consumer spending habits so it can then provide more personalized financial advice, like maximizing rewards and utilizing credit effectively.

Kudos lands $10M for an AI smart wallet that picks the best credit card for purchases

The EU’s warning comes after Microsoft failed to respond to a legally binding request for information that focused on its generative AI tools.

EU warns Microsoft it could be fined billions over missing GenAI risk info

The prospects for troubled banking-as-a-service startup Synapse have gone from bad to worse this week after a United States Trustee filed an emergency motion on Wednesday.  The trustee is asking…

A US Trustee wants troubled fintech Synapse to be liquidated via Chapter 7 bankruptcy, cites ‘gross mismanagement’

U.K.-based Seraphim Space is spinning up its 13th accelerator program, with nine participating companies working on a range of tech from propulsion to in-space manufacturing and space situational awareness. The…

Seraphim’s latest space accelerator welcomes nine companies

OpenAI has reached a deal with Reddit to use the social news site’s data for training AI models. In a blog post on OpenAI’s press relations site, the company said…

OpenAI inks deal to train AI on Reddit data

X users will now be able to discover posts from new Communities that are trending directly from an Explore tab within the section.

X pushes more users to Communities

For Mark Zuckerberg’s 40th birthday, his wife got him a photoshoot. Zuckerberg gives the camera a sly smile as he sits amid a carefully crafted re-creation of his childhood bedroom.…

Mark Zuckerberg’s makeover: Midlife crisis or carefully crafted rebrand?

Strava announced a slew of features, including AI to weed out leaderboard cheats, a new ‘family’ subscription plan, dark mode and more.

Strava taps AI to weed out leaderboard cheats, unveils ‘family’ plan, dark mode and more

We all fall down sometimes. Astronauts are no exception. You need to be in peak physical condition for space travel, but bulky space suits and lower gravity levels can be…

Astronauts fall over. Robotic limbs can help them back up.

Microsoft will launch its custom Cobalt 100 chips to customers as a public preview at its Build conference next week, TechCrunch has learned. In an analyst briefing ahead of Build,…

Microsoft’s custom Cobalt chips will come to Azure next week

What a wild week for transportation news! It was a smorgasbord of news that seemed to touch every sector and theme in transportation.

Tesla keeps cutting jobs and the feds probe Waymo

Sony Music Group has sent letters to more than 700 tech companies and music streaming services to warn them not to use its music to train AI without explicit permission.…

Sony Music warns tech companies over ‘unauthorized’ use of its content to train AI

Winston Chi, Butter’s founder and CEO, told TechCrunch that “most parties, including our investors and us, are making money” from the exit.

GrubMarket buys Butter to give its food distribution tech an AI boost

The investor lawsuit is related to Bolt securing a $30 million personal loan to Ryan Breslow, which was later defaulted on.

Bolt founder Ryan Breslow wants to settle an investor lawsuit by returning $37 million worth of shares

Meta, the parent company of Facebook, launched an enterprise version of the prominent social network in 2015. It always seemed like a stretch for a company built on a consumer…

With the end of Workplace, it’s fair to wonder if Meta was ever serious about the enterprise