Acquco Raises $160M to Acquire & Scale E-commerce Businesses

Investment Surge in Amazon Seller Startups

A significant increase in investment is being observed in startups specializing in the acquisition of third-party sellers on Amazon and their subsequent business development.

Introducing Acquco

Acquco represents the newest entrant in this competitive landscape, distinguishing itself through its founding team. Raunak Nirmal and Wiley Zhang bring firsthand experience from working at Amazon, coupled with a proven track record of building successful multimillion-dollar businesses on the platform.

Series A Funding and Growth Plans

The New York City-based startup has secured $160 million in a Series A funding round, comprised of both debt and equity. This capital injection is intended to facilitate the company’s “aggressive growth plans.” Investors include CoVenture, Singh Capital Partners, Crossbeam, and GoDaddy CEO Aman Bhutani.

While the precise valuation and debt-to-equity ratio remain undisclosed, CEO Raunak Nirmal highlighted key achievements. The company has already surpassed $100 million in revenue within its first year of operation, utilizing less than $2 million in equity capital. Furthermore, Acquco has maintained profitability “since day one.”

Competitive Advantage

Nirmal asserts that Acquco’s proprietary technology and established “proven playbooks” provide a distinct advantage over competitors like Thrasio and Perch. The company facilitates Amazon seller exits within a 30-day timeframe, enabling continued business scaling “to the next level” post-acquisition.

Flexible terms are also offered, ensuring entrepreneurs retain the option to resell on Amazon if desired.

Acquisition Strategy and Revenue Growth

Acquco focuses on identifying promising businesses for acquisition, employing “flexible founder-friendly deal structures.” This approach allows sellers to benefit from the exit while continuing to receive a share of future revenues. The company reports achieving over 100% revenue growth on average after integrating brands into its portfolio.

Founders’ Background and Experience

The formation of Acquco was a culmination of years of experience and insight. Nirmal began his career at Amazon as a business analyst on the merchant technologies team, concentrating on empowering third-party sellers.

At that time, third-party sales were smaller in comparison to Amazon’s retail operations.

The Rise of Amazon Marketplace

The landscape has dramatically shifted since then, with Amazon Marketplace now generating the majority of sales on the platform. Millions of external sellers compete for customers, often utilizing Fulfillment by Amazon (FBA) for Prime shipping eligibility. Acquco’s operations are centered around this dynamic.

From Amazon Employee to Successful Seller

During his tenure at Amazon, Nirmal initiated a brand on the site to gain a deeper understanding of seller challenges and identify potential tool development opportunities.

Subsequently, Nirmal transitioned to full-time Amazon selling, achieving over $7 million in revenue in the brand’s inaugural year. He and COO Zhang then established and divested multiple brands within the Amazon ecosystem, later providing consulting services to “some of the largest sellers in the marketplace,” primarily based in China but targeting the U.S. market.

Expanding the Ecosystem

Many of these clients have since become publicly traded companies, according to Nirmal.

The duo further co-founded a seller outsourcing firm in the Philippines, reducing operational costs and increasing accessibility for sellers lacking extensive teams. They also created Refund Labs, a tool automating the identification and recovery of payment discrepancies, damaged inventory claims, and incorrect fee charges for Amazon sellers.

Focus on Acquco

Nirmal relinquished his role as CEO of Refund Labs to dedicate his efforts to Acquco.

“Our aim was to leverage the knowledge and experience accumulated over the past seven years in the most effective manner,” Nirmal explained to TechCrunch. “Instead of building brands from scratch or consulting for large sellers, we decided to acquire the best brands and enhance their growth using our expertise.”

Proprietary Technology and Data Analysis

The company’s proprietary algorithms analyze thousands of criteria and millions of data points to automate and optimize core functions within supply chain and brand management across its portfolio.

Strategic Growth and Future Plans

Acquco intends to utilize its new capital to enter “hypergrowth mode,” as stated by Chief Strategy Officer Jerel Ho, formerly of WeWork, where he oversaw over $40 billion in M&A transactions.

The startup has set an ambitious goal of scaling its portfolio to over $500 million in revenue by 2022. Funds will be allocated to further developing its technology platform – including tools for automating brand management on Amazon and other retail channels – and continuing brand acquisitions. Expansion of the team is also planned.

Market Opportunity and Investor Confidence

CoVenture founder Ali Hamed highlights the $200 billion Amazon third-party seller ecosystem, which is experiencing a compounded annual growth rate (CAGR) exceeding 50%.

“This represents the most compelling market we’ve encountered since establishing our firm,” he stated to TechCrunch. “Among all the individuals we’ve engaged with, Raunak possesses an unparalleled understanding of the Amazon ecosystem. He essentially guided us on how to identify, evaluate, and deploy capital within this market.”

Hamed expressed strong confidence in Acquco, noting that Nirmal has consistently surpassed CoVenture’s expectations since their initial investment in 2020.

“We have been actively encouraging him to secure additional funding every three months since our first investment,” Hamed added. “Raunak has the ability to acquire businesses and improve them beyond their previous capabilities. He envisions a unique operational model for these assets that operators without native Amazon experience simply cannot replicate.”

Competitive Landscape

Alongside Thrasio, other companies in this space that have recently secured funding include Branded, which launched its own roll-up business with $150 million in funding, as well as Berlin Brands Group, SellerX, Heyday, Heroes, and Perch. Additionally, Valoreo, a Mexico City-based acquirer of e-commerce businesses, raised $50 million in seed funding in February.