Marco Palmero’s Post

After raising a record-breaking $3.4B, the leading Amazon third party seller aggregator, Thrasio, is now filing for bankruptcy! At its peak, Thrasio owed over 500 top-rated brands across various marketplaces, with a primary emphasis on Amazon. The success story of Prime Day 2023 was a remarkable achievement for Thrasio. Growing too fast with marginal focus on economic sustainability eventually took its toll on Thrasio. While marketplace selling business owners achieved rewarding exits, Thrasio investors can’t say the same. This also affirms that corporate MBAs and their sophisticated spreadsheets may not fully substitute the entrepreneurial drive of third-party seller business owners. This bankruptcy creates an unprecedented opportunity for other aggregators and investors to sweep in and acquire some of these highly successful marketplace brands at pennies on a dollar. This remarkable transition from consolidation to fragmentation will be an interesting trend to watch out for.

ebay, making new strides for seller growth. Business cash advance (seller capital) is here

What is your business worth? If you are buying a private business, you would value it around 5/6x earnings. The long-run average for P/E ratio of the S&P 500 is around 19x. I have highlighted some of the most egregious cases in the past and some have since corrected. NVDA is an interesting case as despite having a P/E of 64x its earnings are actually growing exponentially. For the P/E to get back to the long-run average of 19x their earnings would need to reach $57.60, which would be a 340% increase from the last results. Is that unreasonable? Maybe not, as they have seen triple digit increases in the past. ARM is another chip manufacturer who has a stratospheric stock price, giving it a P/E of 414x! To get to the long-run average they would need earnings of $6.33, which is an increase of 2180%.....that seems a bit of a stretch even in a very high growth industry. UBER is a business we are all familiar with. They started business in 2009, 15yrs ago. Their P/E is 99x and to get to the long-run 19x they would require earnings of $3.38, which is a 520% increase. Where would that come from? They are a pretty mature business and they have saturated most developed markets. Self-driving cars might help their margins, but would require huge capital outlays and are not likely in the short-term. I also realise that a lot of 'growth stocks' are being driven by share buy-backs, take AAPL for instance. UBER announced they were buying back $7bn, even NVDA bought back $25bn in 2023! I still think UBER & ARM are outliers and should see corrections.

First a bankruptcy, then a merger News from TechCrunch is that German Amazon Aggregator, Razor, is merging with US based Perch to create a $1.7bn valued business. This is just one week after rival Thrasio filed for Chapter 11 bankruptcy protection. Interestingly the TechCrunch article states "The business model behind e-commerce aggregation has always looked strong on paper: There are millions of retailers selling on marketplace’s like Amazon’s, leaning on the e-commerce giant’s storefront, algorithms and logistics and fulfilment operations." However, it goes on to say "The big problems have been in areas that have always been challenges for any business: how to merge operations in cost-effective ways, and then how to move ahead on single platforms." The challenge here is that 'merging operations in cost-effective ways' and 'moving ahead on single platforms' is exactly what an Aggregator is set up to do. How can a business model be attractive when it can't deliver its fundamental purpose? If it can't aggregate operations in cost-effective ways then surely either a) it is not an Aggregator or b) is is not an attractive business model. Either way, the new entity has some big backers (Black Rock, Soft Bank) and some quick lessons to learn from the Thrasio break down. I wish them luck, but am not convinced the Aggregator model is as attractive in the real market as it is on paper. #digitalcommerce #ecommerce #digital #aggregators #amazonmarketplace #thrasio #cpg #fmcg https://lnkd.in/eY8r6btd

Thrasio, a startup that rolls up third-party sellers on Amazon, on Wednesday said it has filed for Chapter 11 bankruptcy protection and entered a restructuring agreement that includes reduced debt and fresh capital. The bankruptcy filing marks a dramatic reversal for Thrasio, which once bore a $10 billion valuation after raising $3.4 billion from investors including Silver Lake, Oaktree Capital Management and Goldman Sachs Asset Management. Thrasio is the largest among a group of businesses known as “Amazon aggregators” that buy and consolidate third-party sellers on large e-commerce platforms. Other similar businesses that have raised millions from investors include Perch (more than $908 million in total funding), Elevate Brands ($372.5 million), Branded Group ($150 million) and Boosted Commerce ($137 million). Such companies benefited from the boom in online retail kicked off by the COVID-19 pandemic — Thrasio told Crunchbase News in April 2020 after its Series B raise that it was profitable and growing fast — but many saw their businesses begin to falter as consumers resumed their normal shopping habits. #investments #capitalmarkets #capitalraising #fundraising #startupfunding #ecommerce #amazon

eCommerce aggregators thrived during the pandemic, but now face a reality check. #ecommerce #aggregators #trends Thrasio, the US-based e-commerce aggregator that raised billions of dollars, has filed for Chapter 11 bankruptcy protection to cut losses on a mountain of debt. The company has secured $90 million in emergency financing from existing lenders, and the restructuring support agreement covers 81% of Thrasio’s revolving credit facility lenders and 88% of its term loan lenders. Thrasio raised more than $3bn in equity and debt over the years to fuel its roll-up play, and its collapse into bankruptcy protection is one of the most prominent examples of how mighty growth-stage tech companies have fallen in recent times.

Thrasio, a prominent Amazon aggregator, has filed for Chapter 11 bankruptcy protection and entered into a restructuring agreement, citing reduced debt and fresh capital as part of the plan. The company, once valued at $10 billion after raising $3.4 billion from investors, aims to continue its operations and support its brands with the newly secured $90 million in financing. #amazon #bankruptcy #amazonsellers #chapter11 #wisdomwednesday #ecommerce #ecommercebusiness ★ DANIEL FERNANDEZ ★, Mindy Ward, JON SINCLAIR 📈, Enes Uncuoglu, Amir Mustafa

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Some well needed clarity in Ingram Micro's future as it looks to go public again. Good numbers include the 52 million seats managed through CloudBlue platform. Ingram managed to build a successful SaaS business under the hood, which is critical to its diversification story. Bad numbers include the rev decline (-5% in FY23), though it performed better than TD SYNNEX. North America was its toughest market (-13%) which is not surprising. The distribution landscape is becoming one of two stories: US and International. The US is a simpler market and there are GTM choices for vendors: direct, 1-tier, marketplaces, alliances, etc. Internationally, it is still easier to ask the disti to deal with all the complexities around localization, currency, regulations, etc. Overall, distribution has systemic challenges as it navigates its role in a world of SaaS, cloud marketplaces, services-led economies, and amidst a rise of specialists competitors.