Chris Bell, Perch founder and CEO
Perch, part of a growing wave one of companies rolling up successful Amazon brands in the hottest space in retail, just raised $775 million, bringing its war chest to over $900 million as it looks to add to a portfolio of 70 brands acquired in just 18 months and considers product launches.
The funding, the largest Series A round for a CPG company, was led by the Softbank Vision Fund 2, with participation from Spark Capital and Victory Park Capital. Lydia Jett, a partner at SoftBank Investment Advisers, has joined Perch as a board member.
To gauge how hot the space is, investors poured $971.5 million into rollups of mostly Amazon brands and sellers in 2020, a figure that hit $5.7 billion as of last month, according to Marketplace Pulse, with January 2020 as the baseline.
Perch’s largest competitor, against whom it often finds itself bidding for hot acquisition targets, is Thrasio, with a valuation of $1.7 billion. Others include Berlin Brands, Elevate Brands, SellerX and Heyday. Some of its more successful brands include Hotpop popcorn poppers and Flathead reusable straws.
Chris Bell, founder and CEO of Perch, said the company has been profitable since its inception and a unicorn – north of a $1 billion valuation – for some time.
“The overarching idea is to take great brands and make them better, predominantly on Amazon, put them on our technology and process platform, and optimize them in pricing, merchandising, advertising and supply chain,” Bell said. “Since hiring is funded through operating cash flow, the new funding is almost entire for acquisition of products and brands, with some toward platform development.”
Perch drives the front end of ecommerce through boosting SEO and managing inventory based on Amazon platform data, and handles the back end through partnerships with 3PLs and freight forwarders. It recently opened its own fulfillment center outside Los Angeles.
“We’re looking for winning products and brands that have been around for 18 months or preferably longer, with great reviews, a low return rate and they’re profitable,” Bell said. “The beauty of ecommerce is millions of people go every day to Amazon, so there’s really good data on market share over time, reviews, return rates, quality and defect rates.”
He said Perch looks for entrepreneurs in spaces where customers are underserved, that are interested in an exit for a variety of reasons. It could be their brand has reached a point where resources and capabilities are outstripped by fulfillment demands, they’re more interested in creating than scaling, or have other financial reasons like retirement.
While focused today mostly in North America and Western Europe, Bell said Perch has an eye toward Asia and South America, “although we have no firm plans today.”