Berlin's Razor Group Secures $400M for Amazon Marketplace Acquisitions

Razor Group Secures $400 Million to Expand Amazon Seller Acquisitions

The market for startups focused on consolidating successful third-party merchants on Amazon’s Marketplace remains exceptionally strong. Razor Group, a Berlin-based company specializing in acquiring and scaling promising Amazon sellers into larger, multichannel businesses, has recently secured $400 million in funding to further its expansion.

Funding Breakdown and Acquisition Targets

This financing round comprises approximately $25 million in equity for business growth and $375 million in debt dedicated to acquisitions. Target businesses generally generate between $1 million and $15 million in annual revenue.

Despite being less than a year old, Razor Group has experienced rapid development. Founded in August 2020, the company now employs 107 individuals across four locations. It is projected to exceed $120 million (€100 million) in sales from the 30 brands currently within its portfolio, spanning categories such as personal wellness, sports, and home goods.

With the newly acquired debt capital, CEO Tushar Ahluwalia anticipates Razor Group will surpass $480 million (€400 million) in sales within the next 12 to 15 months.

Comparison to Industry Leader Thrasio

For context, Thrasio, a more established player in this market, was founded in 2018 and currently manages a portfolio of 100 brands.

The "FBA Rollup" Model and Razor Group's Differentiation

Numerous companies are pursuing the “FBA rollup” strategy – consolidating businesses built on Amazon’s Fulfillment by Amazon service. The core idea is to leverage economies of scale, advanced analytics, and improved management to transform successful small businesses into larger enterprises.

Razor Group's Technological Approach

Razor Group distinguishes itself through its emphasis on technology. This focus aims to enhance responsiveness in both identifying and acquiring brands, as well as fostering their subsequent growth.

There are approximately 5 million third-party sellers on Amazon, a number that is increasing rapidly. Over 1 million sellers joined the platform in 2020 alone. Thrasio estimates that around 50,000 businesses generate over $1 million annually in revenue through Amazon FBA.

“While building an FBA-based business is viable, opportunities exist to expand beyond that framework,” Ahluwalia stated. “Our goal is to redefine business operations within this sector. We envision ourselves as a new iteration of a company like P&G, cultivating micro-champions in niche markets and identifying undervalued digital assets. Simply viewing this as arbitrage is insufficient.”

Investment Details and Key Investors

The funding round is led by Victory Park Capital (“VPC”), with significant participation from funds and accounts managed by BlackRock, alongside existing shareholders. These shareholders include individual investors and venture capital firms such as 468 Capital, Redalpine, FJ Labs, and Global Founders Capital.

Founders' Background and Experience

Razor Group’s co-founders – CEO Tushar Ahluwalia, Head of Finance Christoph Gamon, and CTO Shrestha Chowdhury – are all alumni of Rocket Internet. Ahluwalia and Chowdhury previously collaborated on Stalkbuylove, an Indian e-commerce venture that ultimately ceased operations.

This shared history provides the founders with valuable experience and connections within the e-commerce landscape, contributing to their ability to secure early financing and navigate the challenges of scaling businesses.

Future Growth and Competitive Landscape

Including the recent $25 million, Razor Group’s total equity funding reaches approximately $40 million. The initial funds were used to establish the business and “validate the model,” according to Ahluwalia. The company plans to raise a larger equity round in the future, with details to be disclosed at a later date.

The substantial debt financing, exceeding the initial plan of $200 million due to strong investor interest, reflects both the perceived opportunity and the growing competition from other well-capitalized roll-up players targeting promising Amazon businesses.

Key Competitors in the FBA Rollup Space

The competitive landscape includes Thrasio, Branded, Heroes, SellerX, Perch, Berlin Brands Group (X2), Benitago, and Valoreo, among others.

Furthermore, companies like Jungle Scout are emerging, providing tools to help third-party sellers remain independent or increase their value for potential acquisition.

Leveraging Technology for Competitive Advantage

Razor Group believes its success will hinge not only on financial resources but also on its technological capabilities. These capabilities are designed to accelerate the identification of high-potential sellers and enhance the growth of acquired companies.

"M&A 2.0" – A Data-Driven Acquisition Platform

CTO Shrestha Chowdhury describes the company’s platform as “M&A 2.0,” a system capable of performing “massive due diligence” at scale. It evaluates approximately 1 million companies weekly based on their performance on platforms like Amazon. “Technology permeates the entire business,” Chowdhury explained, starting with acquisitions, where Razor identifies promising companies more efficiently than competitors.

The platform analyzes thousands of data points and employs algorithms to identify potential acquisitions. This approach allows Razor to source 99% of its acquisitions directly, bypassing brokers and reducing competition and costs.

Early engagement with business owners fosters stronger relationships and reduces time pressure during negotiations.

“Deal-making is inherently personal,” Ahluwalia emphasized. “Sellers need to trust you. Our data-driven approach allows us to initiate these conversations first.”

Expanding Beyond Amazon

The collected data will also be used to identify new sales channels beyond Amazon and optimize sales strategies.

While the company is still young, investors are confident in its potential, considering the founders’ track record and the innovative technology they have developed.

Investor Perspectives

“We are excited to partner with Tushar, Chris and the rest of the Razor Group team. The ability to identify, underwrite, integrate and ultimately create tangible value across a broad suite of e-commerce assets is a real competitive advantage in the marketplace,” stated Tom Welch, partner at VPC.

“We are pleased to make this investment in Razor Group to support the company’s strong growth momentum as it continues to diversify its portfolio of brands and expand into new markets,” added Dan Worrell, MD at BlackRock.