SellerX co-CEOs Philipp Triebel, left, and Malte Horeyseck, right (company photo)
Talk of consolidation in the overcrowded Amazon aggregator space has come to fruition, as Berlin-based SellerX is acquiring Elevate Brands of Austin, giving the new company a combined portfolio of 80 Amazon brands, 40,000 products and a $431 million run rate.
This is the second such acquisition in the past three weeks, after Suma and D1 Brands tied up in late May and became rebranded as The Ambr Group, with a portfolio of 30 brands generating about $100 million per year. It was the first merger of U.S.-based Amazon aggregators.
SellerX co-founders Philipp Triebel and Malte Horeyseck will continue as co-CEOs. Elevate Brands’ co-founder and CEO Ryan Gnesin will become president of the new company, and co-founder and chief M&A officer Jeremy Bell is the global head of M&A. Rob Bell, Elevate’s Chief Growth Officer, will become head of global business development.
The new entity, dubbed SellerX Group and based in Berlin, touted the synergies of the deal, which is expected to close in June. Categories of focus for its brands include sports and outdoors, home and kitchen, mobile accessories, pets and consumables.
SellerX Group played up its technology platform, global supply chain infrastructure and warehouse operations, as well as its ability to launch new products and reach new markets. It will look to Elevate Brands to expand products sold on Amazon into multiple channels.
“Elevate Brands and SellerX are a perfect match: a strong cultural fit, a shared vision, and complementary capabilities,” said Triebel in a release. “This acquisition combines our know-how and diversified portfolios of strong brands with a market-leading technology platform and strong operational infrastructure. By leveraging our combined strengths, I am convinced we are well-positioned to drive further consolidation in the industry.”
After a massive infusion of money into the space from the fall of 2020 to last September, it hit a plateau of $16 billion and has remained there since, according data from Marketplace Pulse, which lists 93 such firms. Spencer Soper of Bloomberg Businessweek reported the coming aggregator consolidation has a “Game of Thrones” vibe. Many players are reportedly on life support, Soper reports, as grand visions of top rollups being the next Procter & Gamble with stables of hundreds of hot Amazon brands have faded.
And just as is the case with the huge rush into DTC, investors are now looking for the promised ROI and profitability from their capital outlays funding aggregators.
Juozas Kaziukenas, founder and CEO of Marketplace Pulse, said expect more mergers and even distressed sales this year as the aggregator space rationalizes in a tough environment with a credit crunch.
“The gold rush to launch and fund new aggregators has been over for 12 months, but the remaining players are pivoting, maturating or simply surviving,” Kaziukenas said. “There are macro forces like interest rates at play, and micro ones like profit margin compression that is causing this.”