On the heels of Heroes announcing a $200 million raise earlier today, to double down on buying and scaling third-party Amazon Marketplace sellers, another startup out of London aiming to do the same is announcing some significant funding of its own. Olsam, a roll-up play that is buying up both consumer and B2B merchants selling on Amazon by way of Amazon’s FBA fulfillment program, has closed $165 million — a combination of equity and debt that it will be using to fuel its M&A strategy, as well as continue building out its tech platform and to hire more talent.
Apeiron Investment Group — an investment firm started by German entrepreneur Christian Angermayer (known first for biopharmaceuticals, then investing and crypto, including playing a role in SoftBank investing in Wirecard) — led the Series A equity round, with Elevat3 Capital (another Angermayer firm that has a strategic partnership with Founders Fund and Peter Thiel) also participating. North Wall Capital was behind the debt portion of the deal. This appears to be the first significant funding of any kind announced by the company since it launched in October 2020. We have asked for more details about how the $165 million breaks down between equity and debt, and Olsam said it is only disclosing the full amount raised. Valuation is also not being disclosed.
Being an Amazon roll-up startup from London that happens to be announcing a fundraise today are not the only two things that Olsam has in common with Heroes. Like Heroes, Olsam is also founded by brothers with track records that lend themselves to diving into becoming Marketplace consolidators.
Sam Horbye previously spent years working at Amazon, including building and managing the company’s Business Marketplace in the UK (the B2B version of the consumer Marketplace). Co-founder Ollie Horbye had years of experience in strategic consulting and financial services.
Between them, they had also quietly built and sold previous marketplace businesses, and they believe that this collective experience gives Olsam — a portmanteau of their names, “Ollie” and “Sam” — a leg up in areas like building relationships with merchants; identifying quality products amid the vast sea of search results that often feel like they are selling the same inexpensive junk as each other; understanding merchants’ challenges and opportunities; and critically building relationships with Amazon and understanding how the merchant ecosystem fits into the e-commerce giant’s wider strategy.
Olsam is also taking a slightly different approach when it comes to target companies. Yes, it is focusing on the usual consumer play you hear about from consolidators — home & garden, sporting, baby and children products, and beauty are typical categories. But alongside that, it is also building out a strategy to sell those products, and others, on Amazon’s B2B portal — the one Sam helped build when he worked at Amazon.
B2B selling includes items like office furniture and office supplies, but also electronics, automotive parts and accessories, kitchenware, and, actually, anything that is potentially sold on the consumer marketplace.
The exception is that with business customers — as you get with members’ only stores in the physical retail world — they may get discounts for bulk purchases, tax breaks, and perhaps a slightly different mix of products more tailored to running their enterprises.
B2B is currently one of the fastest-growing segments in Amazon’s Marketplace, and it is also one of the most overlooked.”It’s flying under the radar,” Ollie said.
“The B2B opportunity is very exciting,” Sam added. “A growing number of merchants are selling office supplies or more random products to the B2B customer.”
Estimates vary pretty wildly when it comes to how many merchants there are selling on Amazon’s Marketplace globally. I’ve seen estimates of 6 million and nearly 10 million. But altogether, those merchants generated $300 billion in sales (gross merchandise value) last year, and that figure is growing by 50% each year at the moment. Amazon itself notes that online B2B sales as a category — beyond, but also including, on Amazon itself — is about 2.3 times bigger than its B2C counterpart.
Combined with that opportunity, consolidating sellers — in order to achieve better economies of scale around supply chains, marketing tools and analytics, and more — is also big business. Olsam, citing estimates from Marketplace Pulse, said that some $7 billion has been spent cumulatively on acquiring these businesses, and there are more out there: Olsam estimates that there are some 3,000 businesses in the UK alone making more than $1 million each in sales on Amazon’s platform.
And to be clear, there are a number of other roll-up startups beyond Heroes also eyeing up that opportunity. Raising hundreds of millions of dollars in aggregate, others have made moves this year include Suma Brands ($150 million); Elevate Brands ($250 million); Perch ($775 million); factory14 ($200 million); Thrasio (currently probably the biggest of them all in terms of reach and money raised and ambitions), Heyday, The Razor Group, Branded, SellerX, Berlin Brands Group (X2), Benitago, Latin America’s Valoreo and Rainforest and Una Brands out of Asia.
Sure, there may be room for all of these, and many more, to move into the roll-up opportunity, but it’s a more complicated equation in the longer run. That is one reason why so many of these companies also emphasize their organizational, M&A, and marketplace expertise: at the end of the day, the technology these well-capitalized startups build will only be as good as the merchants they manage to buy, and the business plans they subsequently execute around their conglomerations.
“The senior team behind Olsam is what makes this business truly unique,” said Angermayer in a statement. “Having all been successful in building and selling their own brands within the market and having worked for Amazon in their marketplace team – their understanding of this space is exceptional.”