SellerX Raises $118M to Acquire & Grow Amazon Businesses

The expanding Amazon Marketplace is fostering a new wave of e-commerce ventures focused on acquiring and scaling promising smaller businesses operating on the platform. These startups aim to achieve economies of scale within the Amazon ecosystem. Recently, SellerX, a Berlin-based company, secured $118 million (€100 million) in funding to acquire smaller enterprises utilizing Fulfillment by Amazon for payments, logistics, and product delivery.

This funding round was jointly led by Cherry Ventures, Felix Capital, and TriplePoint Capital, with additional investment from Village Global. Notable participants include David Schneider, co-founder of Zalando, Chris North, CEO of Shutterfly and former CEO of Amazon UK, and the founders of KW Commerce, a prominent German Amazon seller specializing in mobile phone accessories and home goods.

This $118 million represents SellerX’s initial seed funding – the first capital raised to date – and consists primarily of debt alongside some equity. The funds will be used for acquisitions, enabling the company to execute its strategy of becoming “the digital Procter & Gamble,” as articulated by co-founders Malte Horeyseck and Philipp Triebel.

SellerX will concentrate on “evergreen consumer goods” within categories such as household items, pet supplies, garden products, children’s goods, and beauty products. The company has already completed one acquisition, and anticipates that further acquisitions in the coming weeks will result in a revenue run rate of €20 million by year-end, according to Horeyseck.

The trend of consolidating Amazon Marketplace businesses, known as “roll-ups,” has gained significant momentum in recent months. Numerous startups have raised substantial funding, a significant portion of which is debt-based, to identify and acquire successful smaller companies selling and fulfilling orders through Amazon.

Heyday, a U.S.-based competitor, announced a $175 million round just yesterday. Earlier this week, London’s Heroes secured $65 million in funding. Perch raised $123 million last month, and Thrasio, a major player in this space, achieved a valuation of $1.25 billion in a debt round earlier this year.

The opportunity stems from Amazon’s rapid rise as a dominant force in e-commerce, a trend further accelerated by the Covid-19 pandemic. The pandemic prompted a shift towards online shopping, either by preference or necessity (with ‘non-essential shops’ in the UK temporarily closed for in-person retail). In the last quarter, Amazon reported revenues of $98 billion, with product sales accounting for $52 billion. It is estimated that marketplace sellers represent just over 50% of this figure, and Felix founder Frederic Court suggests Amazon already accounts for 50% of all online retail.

Court described Amazon as “the new high street” in a recent interview.

Simultaneously, there has been a growth in “D2C” (direct-to-consumer) businesses, where companies bypass traditional retailers and establish their own brands to sell unique products directly to consumers. Amazon has played a key role in this development. Similar to how authors can now self-publish on Amazon, businesses can list products and potentially reach a vast customer base without needing to secure traditional retail partnerships.

However, the Amazon platform also presents challenges due to significant fragmentation. As Amazon’s popularity grows, it becomes increasingly difficult for individual sellers to gain visibility or differentiate themselves from competitors.

The platform also features a substantial amount of low-quality merchandise, with many sellers reselling products purchased from wholesale sites, leading to a proliferation of identical, unbranded items.

For consumers, it can be challenging to distinguish between high-quality and inferior products, compounded by ongoing issues with the integrity of Amazon’s review system and the presence of questionable products. While Amazon is actively working to address these problems, they persist.

This creates a complex environment on Amazon, where the platform’s appeal often relies on its Prime delivery promises and the ability to find something to meet a need, rather than consistently offering exceptional products. The platform functions as an “everything store” due to its sheer scale.

Horeyseck explained that SellerX’s goal, and that of its competitors, is not simply to acquire the most successful companies, but to cultivate thriving businesses by focusing on legitimate, well-performing sellers who may lack the resources, expertise, or long-term commitment to sustain their growth. The strategy involves acquiring these businesses and applying SellerX’s analytics, processes, and developing production relationships to nurture their potential.

Horeyseck anticipates a mutually beneficial outcome for SellerX, the smaller merchants, and Amazon itself.

“I think basically everything we are doing will help Amazon have a better quality marketplace,” he stated. “This is about creating strong D2C brands, where you get quality every time. Amazon needs that in its marketplace right now.”

Filip Dames, founding partner of Cherry Ventures, commented in a statement, “The diverse seller landscape on Amazon provides a unique opportunity to acquire some category-winning, highly profitable products, empower them through technology, and build them into the next-generation consumer brands. The founders Malte and Philipp combine decade-long e-commerce and buy-and-build expertise, which uniquely positions them to capture this opportunity.”