In a surprising turn of events, the e-commerce aggregation industry is changing once again with news of a merger between two major players. Berlin’s Razor Group has acquired U.S.-based Perch and has also secured over $100 million in additional funds from investors, led by Presight Capital. This move is intended to strengthen their business and expand on a model that they firmly believe in.
“The combined business now has an enterprise value of $1.7 billion and approximately $400 million in debt, which is not due for repayment for at least four years,” according to a source familiar with the deal. The restructuring of this debt was a stipulation for the merger.
This merger is just one example of the current consolidation and restructuring trend taking place in the world of e-commerce aggregation. Perch, which had been in talks to sell for some time, was previously known for acquiring Web Deals Direct. Meanwhile, Razor Group has been quietly acquiring other smaller aggregators, such as Stryze and Factory 14. Other industry players are also following suit and pursuing mergers and acquisitions.
Interestingly, this deal comes just days after Thrasio (also a major player in e-commerce aggregation) filed for bankruptcy, despite raising an impressive $3 billion in funding. However, Perch and Razor maintain that they were unaware of Thrasio’s troubles leading to this outcome.
“I never would have guessed that Thrasio’s equity investors would allow it to reach Chapter 11,” one source commented. It’s worth noting that both Perch and Razor share some investors with Thrasio, potentially making the situation more complicated.
“I believe our founder-led approach is a key factor in our success,” said Tushar Ahluwalia, CEO and co-founder of Razor Group. “You need someone with passion and dedication, not just looking for a quick profit. Our focus has always been on our customers and agile supply chain, which has allowed us to stay ahead of the game.”
The business model behind e-commerce aggregation has always seemed promising, with millions of retailers utilizing marketplaces like Amazon for their sales. Bringing these retailers together can result in better economies of scale and offer opportunities for innovation and market research. However, integrating operations and unifying platforms has proven challenging for many companies.
Ahluwalia remains optimistic about Razor Group’s future, stating that the company is on track to reach $1 billion in revenue in the next 4-8 quarters and is currently profitable. He also expressed a desire to follow in the footsteps of successful “C2M” (consumer to manufacturing) models in Asia, such as Shein.
“I believe we have a strong foundation and the right mindset to overcome these challenges. We are the consolidators,” he emphasized.
Overall, this merger solidifies Razor Group as a market leader in e-commerce aggregation and showcases the company’s commitment to customer satisfaction and efficient operations. It’s clear that investors still see potential in this industry, despite the struggles that many companies have faced. Only time will tell if Razor Group’s approach will prove successful in the long run.
