Berlin Brands Group, Now Valued At Over $ 1 Billion, Raises $ 700 Million To Buy And Scale Merchants That Sell In Markets Like Amazon – TechCrunch
Berlin Brands Group – one of the new waves of e-commerce startups hoping to create lucrative economies of scale by buying small brands that sell in marketplaces like Amazon and using the technology to run and make them evolve more effectively funding to fulfill this mission. The startup has closed a $ 700 million round, comprising both equity and debt, which it will use in part to continue building its execution and logistics infrastructure, as well as its technology platform, and partly to buy more businesses.
BBG has confirmed that the investment – one of the largest to date in space – brings its valuation to more than $ 1 billion.
Bain Capital leads the equity portion of this round. The deal will also see the buyout of a previous investor, Ardian, for an undisclosed amount separate from the increase of $ 700 million.
This round of funding is the second announced by BBG this year. In January it announced it would invest $ 302 million on its own balance sheet for mergers and acquisitions, and in April it announced a funding round of $ 240 million. The latter $ 700 million is different in that it includes the equity component alongside equity.
BBG started developing his own products and selling them on Amazon and other markets – Founder and CEO Peter Chaljawski was a DJ in a previous life and started out focusing on the audio equipment he developed for himself -same.
Over time, he saw an opportunity to diversify this into a larger consolidation game, where BBG would also acquire and merge third-party brands in its business, taking the opportunity to provide third-party business owners with a path to exit and bring these small brands have more scale, more marketing and more technology to improve the efficiency of their operations.
Today, the mix totals 3,700 products and 14 own brands, including Klarstein (kitchen appliances), auna (appliances and music equipment), Capital Sports (home fitness) and blumfeldt (garden). BBG claims to have access to some 1.5 billion e-commerce customers in various markets where it sells products in Europe, UK, US and Asia. Notably, unlike many others in the same space as BBG, it focuses on more than Amazon, with some 100 channels in 28 countries.
This list of “many others in the same space” is long and seems to grow longer by the day. Yesterday, two of them – Heroes and Olsam – respectively raised $ 200 million and $ 165 million. Others taking advantage of the opportunity to consolidate merchants who sell through Fulfillment by Amazon include Suma Brands ($ 150 million); Raise the brands ($ 250 million); Perch ($ 775 million); factory14 ($ 200 million); Thrasio (currently probably the biggest of them in terms of reach, money raised and ambitions), Heyday, The Razor Group, Branded, SellerX, Berlin Brands Group (X2), Benitago, Valoreo from Latin America and Rainforest and Una Brands outside Asia.
As more and more startups enter the fray, any battles to buy the best from third-party brands will become more and more of a challenge, and Bain’s support should therefore help BBG fight against this competition.
“With the commitment from Bain Capital and the additional funding secured, we have set our next step on our path to building a global brand house,” Chaljawski said in a statement. “This allows us to achieve strategic brand acquisition and development goals on a global scale, as well as operational and logistical expansion. Bain Capital’s experience with founders around the world will help us continue our evolution as a leading e-commerce company in brand scaling.
“BBG is a disruptive leader in the rapidly evolving consumer goods space. Their ability to develop and evolve brands that respond to current consumer trends through their highly efficient e-commerce platform provides the company with tremendous growth potential in a rapidly growing market, ”added Miray Topay , Managing Director of Bain Capital Private Equity. “We have partnered with many founding leadership teams and look forward to helping Peter and his team achieve their goal of becoming a global leader in consumer e-commerce.”