Thrasio, an acquirer of Amazon third-party private-label businesses, has closed on a $110 million financing at a post-money valuation of $780 million, the company has exclusively told Crunchbase News.
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The round included $75 million in equity and $35 million in debt. Insiders led the financing, which included participation from Peak6, RiverPark Ventures, WTI and Upper90. Upper90 was the primary lender.
The new funding brings the startup’s total funding raised to date to $250 million and marks its third investment in a year’s time. In total, Thrasio has raised $163 million in debt and $95 million in equity. The company had just raised a $20 million Series A in December, and a $6.5 million seed round in April 2019. Seed investors included Craig Kallman, CEO and chairman of Atlantic Records, Seamless co-founder Jason Finger, and RiverPark Ventures, among others.
What Thrasio has been able to do in a short amount of time is impressive. Serial entrepreneurs Carlos Cashman and Josh Silberstein founded the company in mid-2018 and have since quietly and steadily built a business that they say has been profitable since inception and, well, growing like crazy.
Specifically, its current valuation has increased 32 times compared to its seed round valuation around the same time last year. In the last 18 months, its gross revenue has surged from zero to over $200 million. The company says it now has over $35 million in TTM EBITDA, which is its EBITDA over the trailing 12 months (TTM) of operations.
What it does
So what does Thrasio actually do? It’s pretty simple really. It finds the “top-reviewed, bestselling” essential everyday products on Amazon, and buys the brands from the small business owners. Many of those (usually seven-figure) businesses have grown faster than the owners have expected, according to Silberstein.
“These kinds of businesses are easy to get started but when they succeed, they become harder to manage over time,” he told Crunchbase News. “We’re able to come in and give them a terrific outcome for something they’ve built they might not have had otherwise.”
Thrasio comes in, pays these often mom and pop shop owners upwards of $1 million for their business, and then integrates the brands.
“We’re not interested in fad products,” Cashman emphasizes.
So far, Thrasio has acquired 43 businesses in all-cash transactions and integrated them onto its proprietary operating platform. It then works to optimize them through branding and search, for example. Products include Beast Gear, a fitness equipment brand; TrailBuddy Hiking Poles, a seller of anti-fatigue floor mats and Pet Deodorizer.
“For these types of businesses, getting an exit is not always as easy as it should be when you have something that works,” Silberstein told Crunchbase News. “There’s not a lot of institutional buyers out there for companies with less than $5 million in profit.That’s where we come in. We make them millionaires and they can move on to something else if they want.”
The distributed company currently has over 200 employees and plans to continue hiring with its new capital. It has offices in Boston, New York and Houston, among other cities.
Investors weigh in
Seamless founder and investor Finger said he believes Thrasio has built “one of the fastest-growing companies in recent memory.
“And they’ve done it thoughtfully and collaboratively, without sacrificing operational discipline,” he added.
Upper90 Partner Alex Urdea said companies like Thrasio are the reason his firm was started.
“Thrasio had a truly innovative business model, strong unit economics, a large moat, and experienced founders,” Urdea said in a written statement. “But most other lenders chose to focus on its short operating history and the amount of equity that had been raised. Upper90 understood the opportunity–and Thrasio’s needs. We created a facility providing timely capital, operational flexibility, and the ability to scale. The initial commitment has now been upsized by over 20x.”
Illustration: Li-Anne Dias