SellerX buys KW-Commerce: takeover at Amazon consolidator

At the latest, the takeover of KW-Commerce makes the business in Germany a de facto three-way battle. In addition to SellerX, there are two other competitors that are valued at more than a billion dollars and can therefore be described as “unicorns”: the Berlin Brands Group (BBG) and the Razor Group.

Both of them also have huge funds for acquisitions. According to a survey by e-commerce analysts Marketplace Pulse, Razor raised capital of $ 572 million. With 1.3 billion dollars in this ranking, BBG even ranks second worldwide after Thrasio. SellerX has completed the current financing round after the survey, but is currently in fifth place worldwide with around 750 million dollars.

The example of SellerX shows how fast companies are growing. Since the start in August 2020, the founders have opened branches in London, Miami and Shenzhen, China, in addition to their headquarters in Berlin, and have taken over more than 40 dealers.

But the latest acquisition is on a new scale. That is out of the question, even if both companies have agreed not to disclose the purchase price.

“KW-Commerce is one of the largest Amazon retailers worldwide, which has grown organically to 100 million euros in sales,” says Philipp Triebel, co-founder of SellerX. The Webretailer website lists KW-Commerce among the ten largest Amazon sellers, measured This is based on the number of reviews, which allows conclusions to be drawn about the number of orders.

According to the second SellerX founder Malte Horeyseck, KW-Commerce is a “product launch machine”. The company primarily offers mobile phone accessories as well as consumer goods in the household, garden and pets sectors – an area in which SellerX already has numerous own brands.

Delivery times are only certain with our own warehouse

For SellerX, however, it is about more than just an interesting product portfolio. With KW-Commerce you also buy a high-performance IT infrastructure and specialists who have extensive experience in connecting brands via interfaces.

And even more important: You get an independent warehouse infrastructure in Asia and the European target markets. It is true that Amazon also offers its dealers warehouses. But in doing so, they make themselves dependent on the logistics of the US giant, which sometimes changes delivery times or stops deliveries and deliveries on its own initiative.

This can lead to delivery problems, which SellerX wants to avoid in the future with its own warehouse. In addition, they can then also sell their own brands on platforms other than Amazon.

KW-Commerce’s 32,500 square meters of storage space corresponds to more than 4.5 soccer fields. “It takes at least a year to set up a warehouse yourself and run it up to full productivity,” says Horeyseck, who has already set up the online fashion retailer Dafiti in Brazil.

In addition, SellerX gains new employees with the takeover who maintain direct relationships with local producers, as well as teams of quality controllers. KW-Commerce founders Jens Wasel and Max Kronberg should also strengthen SellerX, they will continue as managing directors in the future.

New round of financing rates SellerX as a unicorn

Shortly before the takeover was announced, news of a new round of financing had already leaked. As the Handelsblatt exclusively learned, SellerX was valued at more than one billion dollars. The newly collected capital is not yet taken into account (pre-money assessment). So far, the company has already had $ 500 million, or 441 million euros, available for further growth and the financing of acquisitions, largely in the form of a line of credit.

SellerX receives this financing from Blackrock and Victory Park Capital, while Belgian private equity firm Sofina, the Abu Dhabi Investment Authority and existing investors are participating in SellerX and are thus investing equity. A total of 661 million euros (750 million dollars) will be made available to build the company.

Loans are a common form of financing for SellerX and other companies in the segment, unlike many other start-up business models. For investors, the risk is relatively low because the company takes over profitable companies. But the classic start-up investors still want to achieve their typical high returns. The big challenge is therefore to achieve relevant economies of scale through the merger of the companies after the takeover.

But is there enough potential for savings at already successful companies? Malte Horeyseck is optimistic: For example, container price negotiations and productivity in the warehouse could save costs. Then companies like SellerX could sell at lower prices than smaller retailers.

However, there is hardly a start-up financier specializing in e-commerce who does not have an Amazon consolidator in its portfolio. The competition is fierce, and SellerX’s competitors are also highly financed.

Almost 90 buyers on the hunt for Amazon retailers

Marketplace Pulse has nearly 90 companies buying up Amazon retailers, half of them venture capital. Overall, the sector has so far attracted twelve billion dollars in capital worldwide. Ten of the companies are based in Germany. The most important are:

• BBG has a special position among buyers. The company, founded by Peter Chaljawski in 2005, is a successful retailer itself and has already generated sales of more than 300 million euros with its own brands via Amazon and other channels before it began taking over other brands in 2020. In addition, BBG already has its own huge warehouse, which makes it more independent in terms of logistics.

  In the past 12 months, BBG has taken over 42 brands, which it now carries in addition to the 14 brands it has built itself. Experts see this expertise in brand building and online trading as the greatest strength of BBG. Just a month ago, the company received additional growth capital of 100 million dollars from Ardian.

• The Berliners Razor Group had completed their latest financing (financing round B) in November, in which the company collected the equivalent of 110 million euros and was also able to exceed the billion dollar valuation. As with SellerX, BlackRock and Victory Park Capital are among the donors, and the start-up investor 468 Capital and 24 other investors are behind the company.

  Razor Group emphasizes a slightly different approach than many of its competitors: Similar to BBG, Razor wants to sell the products of the Amazon retailers it has bought on different channels and thus become more independent from Amazon and strengthen sales. The Razor Group plans to complete 80 acquisitions by the end of the year and aim for sales of $ 100 million in the coming year.

• Branded is a spin-off from the venture capitalist Target Global. In the spring, the company of Pierre Poignant, ex-boss of the online retailer Lazada, was able to collect 150 million dollars from the US investment company Tiger Global, among others.
• In addition, among others, the still operates in Berlin The Stryze Group, which raised $ 100 million in February and has since bought 30 retail brands.

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