Thrasio [Amazon e-commerce roll-ups]
I've been seeing M&A Analysts on Linkedin for an investment platform called Thrasio recently - was curious if anyone had any insights on what it's like to work for Thrasio (specifically on the M&A team) and Thrasio as a business itself.
Paging m_1 - curious to get your thoughts
Have interacted with quite a few people at Perch, Thrasio and a few of the other aggregators/roll up guys. I think I'm missing something big, but I've talked through these companies with a few VC firms well known in DTC/DNVB (investors in Warby Parker, Bonobos, etc) and we couldn't really figure out the play? Bullets for quick & dirty thoughts while on a call...
a) Being Amazon dependent is incredibly risky. We have a company that does 8 figures on Amazon and some of the antics they've pulled with us are ridiculous. They truly do not give a fuck about you as a merchant, nor how big you are. I have friends who do 9 figures on Amazon and still run into business-breaking problems. Do too well and Amazon will cut your throat. When COVID started, Amazon completely screwed FBA sellers.
b) Was not really overly impressed with the people I've met at these firms. There's no way I would turn down a gig at a legitimate private equity or growth equity firm to work at Thrasio. Not much M&A going on. Very very simple to buy an FBA biz compared to what you'll see in true PE. For the co, this is the beauty of being FBA focused. It's so easy any mouth breather can do it.
c) Founders of these aggregators are probably making $$$. Rounds of funding = options for secondary transactions = $$$.
My guess is that these all blow up spectacularly in 2 - 3 years unless they scale out of Amazon...which is really tough. Paid channel dynamics have become very rough over the last 5 years.
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Look at how fast they scaled with min dilution, really hard to do. Same with REV. REV pitching and securing capital from retail investors at ridiculously favorite terms is a 200 IQ move. Why bother sourcing institutional capital when you can do what REV is doing. Never thought I'd be posting about how great Tai Lopez is but you have to give him and the Zoosk guy credit...they've done a lot in a short period of time. Maybe if you have examples of more impressive aggregators you should post them, but they don't exist. Maybe Mohawk but I haven't looked at their filings in a while...
the glassdoor reviews are brutal and these CSC clowns have a dead ceo (zappos) and misspelled the wayfair ceos on their investors page
Can you talk more about paid dynamics becoming rough over the past few years? Any links you have discussing the same would be legit, also.
Hey @m_1 - would love to hear some more detailed thoughts on the space. I have been talking to a few people at Thrasio and VC contacts who invested in the space -- I have heard nothing but bullish sentiment from the investors. I am mainly considering these type of firms for a post-banking position. I do not want to go buy side for reference.
a) Thrasio has the former CFO of Amazon on their Board of Directors... and the people at Advent I talked too seemed to think the platform risk of Amazon is overestimated. I read a blog post from another VC that touched on this. Will try to find and link it.
b) I tend to agree. Not looking at an M&A role here, there are other teams (strategic finance and bus dev) that have much more impressive backgrounds and seem to have better impact on P&L -- I want to stop being a deal monkey anyway...
c) I wonder what the equity payout is going to be like for an employee at a firm like Thrasio or Perch. Am I stupid to be impressed by the fact that they were the fastest unicorn in history? And all the PR reports show strong profitability and growth numbers.
You’re not going to get real equity exposure once a company is this large already. Even if it goes up 10x from here. Risk adjusted, not worth it...
I would completely agree with the idea that it is better to buy DTC or B&M brands and bring them onto Amazon, versus buying Amazon-only “brands”. I think they will find it very difficult to bring those into other channels successfully.
I also put brands in quotations above because it seems like Thrasio is just buying products in very basic categories. There’s almost zero differentiation in the categories and products that Thrasio is pursuing. This is in complete contrast to what an established CPG conglomerate would do, where they really need to find brands that already have some traction with consumers. If we’ve learned anything from Amazon, it’s that they’re very successful in disrupting categories where brand matters less.
Exactly, there's no sustainable way to own a marketplace product unless you have a huge ops advantage (something incredibly hard to manufacture) or a tech/IP advantage.
This aged well. Time go give m_1 his flowers.
I take stonk tip payments in pepperoni pizza
Founder went on Invest Like the Best Podcast - worth a listen
I think this is just a hype.
Wrong type of buyers.
On paper those deals might look good but majority of stores are exclusively tied to $AMZN platform which is extremely risky.
Many won't survive because e-comm. asset prices are inflated. I'll say you have pre-covid and covid prices, difficult to do operational improvements within those stores.
I think in the future we might see specialization - a niche vertical integrators will be more successful than those thrasio and cos. jumping from one niche to another.
People I know working there are not the most impressive
bump
I know a guy working there. Smart guy undoubtedly but something is just a little...off about him. Kinda in a self-absorbed way that is more extreme than others I've seen in finance. As in if you've got anything unique or good about yourself, he's going to one up you if he can. I assume these people are attracted to "get rich quick" type of things like this seems to be. I'd probably avoid unless it's last case option.
I have a colleague that just accepted an offer there. I'll be sure to check in and see how he's liking the role over the next few months. He's coming in as an Associate with 6 YOE with starting salary of $150k and all bonus and signing bonuses paid in the form of equity.
Interviewed there last year for an M&A role, thought the company had an extremely interesting business model and the people I talked to were very nice and easy to talk to. I chose not to move forward because the pay was on the lower side for an m&a job, I’m sure they’ll grow even more in the near future though
Seems to be a pretty active space - have come across a couple other players replicating the Thrasio model. I don't see any way around the risk of Amazon just shutting off the lights on you though.
Two people from my group left in tandem to join Acquco - seem to be poaching good talent
I accepted an offer from Thrasio. Great experience so far. Happy to answer any questions about the space people may have
how is comp (inc equity)?
why did you not join one of the competitor, earlier stage ones which would offer more equity (greater upside)?
view on the space? in particular europe - feels like a gold rush; do you see people making out like bandits from this?
thanks!
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Very helpful. Can you comment more specifically on the comps package (base + equity)? Looking at the next biggest aggregator - Perch / Elevate etc and would love to compare comps at the mid level (6-7 YOE)
Not specifically, unfortunately. I would expect a significant decrease in cash comp.
Think these guys are interesting, I'm sure everyone knows a couple people who tried to start an Amazon FBA business themselves, but they are usually run by 1-2 amateurs and have plenty of room for cost efficiencies and revenue growth. Additionally, when the FBA business is just a couple young guys, it's pretty easy to toss over a lump sum lowball offer and tell those guys to not have to work a day in their life again, and you can snag their business for a pretty good steal
Still a ways to drop imo.
Any thoughts on Aterian?
A friend of mine said that Thrasio laid off their entire M&A team of ~40 people. Is this true?
They are filing bk soon
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