Deutsches Einhorn takes over US competitor Elevate Brands

Dusseldorf Philipp Triebel has an ambitious goal. “We want to build a new generation of global consumer goods group,” says the co-founder of SellerX to Handelsblatt. In the evaluation, the start-up from Berlin has already broken through the one billion US dollar mark, making it a so-called unicorn. Now the buyer of successful e-commerce brands also wants to push into these dimensions in terms of sales.

SellerX has now taken an important step towards this. With the takeover of US competitor Elevate Brands announced on Wednesday, the start-up is expanding its sales, which it largely makes through trading via the Amazon marketplace, to more than 400 million euros. Together they will have more than 40,000 products in the future, which they will offer under around 80 different brands.

Following the example of the US company Thrasio, companies that buy up successful Amazon sellers were considered a great hope for growth. Investors poured billions into these companies. The financial data service provider Marketpulse counted more than 90 of these so-called Amazon aggregators at times. But with the slump in e-commerce after the pandemic, selection has also begun there.

SellerX, which has been provided with capital of 750 million euros by investors since its foundation in August 2020, intends to take an active position in this. “The industry is in the process of consolidation and we want to play a leading role in this,” announced Triebel, who founded SellerX together with Malte Horeyseck. “With the acquisition of Elevate Brands, we are at the forefront of this.”

The toughest competitor in Germany is Razor. According to its own statements, the Berlin-based company made sales of 453 million dollars with its brands last year and is buying up one competitor after the other. After Factory 14 from Spain and Valoreo from Latin America, Razor took over the German Stryze Group in April.

E-commerce growth flattens after Corona boom

At first glance, the Amazon aggregators’ business model seemed as simple as it was promising. They bought up retailers who had successfully established their own brands on the Amazon marketplace. They wanted to benefit from their growth and generate additional synergies.

The industry is in the process of consolidation and we want to play a leading role in this. Philipp Triebel, founder of SellerX

“Size is crucial in e-commerce,” says SellerX founder Triebel. At the end of 2021, the company had bought the online retailer KW Commerce with a turnover of 100 million euros. The company’s own brands now cover product groups from baby items to gardening tools and office supplies.

But when e-commerce growth slowed down again last year after the boom of the Corona years, the dreams of many investors threatened to be shattered. Pioneer Thrasio laid off several hundred employees, and SellerX also cut jobs. “The buyers have taken over many of the brand retailers at valuations that are too high,” observed Nils Seebach, e-commerce expert at the Etribes consultancy.

For example, the founder of Elevate Brands, Ryan Gnesin, announced last year that he would expand the portfolio from 32 to 100 brands through acquisitions. However, not a single brand was taken over after that. In view of the difficult market situation, Gnesin had to concentrate on integration and improving operational processes – and is now losing its independence.

Investors give SellerX a further 60 million euros in growth capital

The remaining providers such as Thrasio, Razor or SellerX are now collecting the weakening competitors. Along with the acquisition of Elevate Brands, existing SellerX investors, led by Belgian venture capitalist Sofina, have provided the company with an additional EUR 60 million in capital.

>> Read also: The billion dollar illusion: The hunters of the Amazon brands are slipping into the crisis

“With its solid capital structure and profitability, SellerX is a strong candidate to shape the consolidation activities that have just begun in the industry,” said Harold Boel, CEO of Sofina. Existing investors such as L Catterton, Cherry Ventures and Felix Capital also invested in SellerX again in this round.

“This new capital allows us further growth,” says Triebel. “We want to invest it in further acquisitions, but also in new products.” SellerX brands have launched more than 2,000 new products this year alone.

What was interesting about the takeover was not only the 32 additional brands from Elevate Brands. “The company is very successful in bringing its brands to stationary retail,” says Triebel. “We also want to use this for our brands in Europe in the future,” he announces.

That was also an important factor for the investors. The portfolio is positioned to transform the group into a global champion of consumer brands that integrate online and brick-and-mortar retail, said Christopher North, managing partner at L Catterton.

Initially, SellerX wants to concentrate on Europe and the USA, where Triebel still sees a lot of potential. But his plans go beyond that: “In the medium to long term, we want to be 100 percent global.”

More: The Einhorn-Bilanz – will these 36 billion German start-ups get through the crisis?

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