Perch Acquires Web Deals Direct for $100M+

Perch Acquires Web Deals Direct to Expand Amazon Marketplace Presence

Following a $775 million funding round earlier in the year, Perch has completed a significant acquisition. This strategic move is designed to integrate new brands and operational infrastructure, bolstering its competitive standing in the rapidly evolving landscape of Amazon marketplace consolidation.

Deal Details and Company Overview

Perch has acquired Web Deals Direct, a prominent Amazon seller with a portfolio of 30 distinct brands. Web Deals Direct generates approximately $80 million in annual revenue and also manages its own warehousing facilities.

While the specific financial terms remain undisclosed, sources indicate the transaction was valued between $100 million and $200 million.

The Amazon Marketplace and Roll-Up Strategy

Amazon’s marketplace hosts millions of merchants who utilize the platform’s extensive resources. These include its storefront, search capabilities, fulfillment services, payment processing, warehousing, and delivery network.

Perch is among a growing number of companies, such as Elevate Brands, Thrasio, Heyday, SellerX, Branded, and Razor Group, that are actively pursuing a “roll-up” strategy. This involves acquiring and consolidating successful Amazon sellers to achieve greater economies of scale and leverage advanced sales analytics.

Consolidation of Consolidators

This acquisition is noteworthy as it signals a potential trend toward consolidation among the roll-up companies themselves.

Web Deals Direct’s product categories encompass home goods, sporting goods, arts and crafts, pet supplies, and office products. Perch’s VP of Acquisitions, Nate Jackson, highlighted WDD’s success as a key factor in the acquisition. The company has amassed an impressive 110,000 customer reviews and a customer base of 2.3 million.

Synergies and Growth Potential

Joining Perch is expected to expand Web Deals Direct’s reach to a wider customer base. Furthermore, it will provide access to enhanced analytics, leveraging insights from Perch’s existing portfolio of approximately 70 brands, which operate within similar categories.

Adam Feinberg, CEO of Web Deals Direct, stated, “We scaled our business to $80 million in sales within five years. Partnering with Perch, proven eCommerce operators, presents equally exciting growth opportunities for the next five years.” He further expressed confidence in Perch’s team and long-term vision.

Expanding Fulfillment Capabilities

The acquisition includes a 230,000-square-foot warehouse in California. Perch is now actively seeking additional warehouse space on the East Coast. This move indicates a strategic shift towards greater control over the fulfillment process, potentially improving margins and reducing reliance on Amazon’s services.

Leadership Perspectives

“This deal represents a significant milestone for Perch,” said Chris Bell, founder and CEO of Perch. He praised the organization built by Adam Feinberg and the Web Deals Direct team.

This expansion into fulfillment aligns with Perch’s long-term strategy. Prior to founding Perch, Bell and the company’s COO were instrumental in developing the Wayfair Delivery Network for Wayfair.

Leveraging Prior Experience

The Wayfair Delivery Network handled 3 million “heavy bulky orders” annually, reducing delivery times from a typical month to just two days. Perch intends to apply this expertise to optimize its own e-commerce operations.