Thrasio is a private equity firm that acquires and operates successful third-party businesses on Amazon’s marketplace. The company was founded in 2018 by Joshua Silberstein and Carlos Cashman, both experienced entrepreneurs and investors. Let’s explore Thrasio success story.
The idea behind Thrasio was to identify successful Amazon businesses that were already generating substantial revenue and profits, but may be under-optimized or lacking resources to reach their full potential. Thrasio then acquires these businesses and uses its expertise in marketing, advertising, and operations to grow them into even more successful and profitable enterprises.
Thrasio’s business model is to acquire Amazon businesses that generate at least $1 million in annual revenue, with the goal of scaling them to generate at least $10 million in annual revenue. The company has a rigorous due diligence process to ensure that the businesses it acquires have strong fundamentals and growth potential.
Once a business is acquired, Thrasio’s team works closely with the existing management to identify opportunities for growth and improvement. This may involve optimizing product listings, improving supply chain management, and investing in marketing and advertising campaigns. Thrasio also leverages its scale to negotiate better deals with suppliers and service providers, which can improve the profitability of the business.
Thrasio has been very successful in executing this strategy, and has rapidly become one of the largest acquirers of Amazon businesses. As of early 2023, the company has acquired over 500 Amazon businesses, making it one of the largest operators on the platform. Thrasio’s success has helped to establish a new industry of Amazon-focused acquirers, and has attracted significant investment from institutional investors.
Thrasio has raised over $1.75 billion in funding to date, including a $1 billion funding round in late 2021. The company has also expanded into international markets, with a focus on Europe and Asia, and has plans to continue to grow its presence on Amazon and other e-commerce platforms.
Founding History of Thrasio
Thrasio was founded in 2018 by Joshua Silberstein and Carlos Cashman, two experienced entrepreneurs and investors with a track record of building and scaling successful businesses.
Silberstein and Cashman met while working together at a previous startup called VMG Partners, a private equity firm that specialized in investing in consumer-facing businesses. While at VMG, they both became interested in the potential of Amazon’s third-party marketplace as a platform for building successful e-commerce businesses.
In 2018, Silberstein and Cashman decided to leave VMG and start their own company focused on acquiring and scaling successful Amazon businesses. They raised $500,000 in seed funding from family and friends, and began building a team of experts in e-commerce, marketing, and operations.
Thrasio’s early success was driven in part by its focus on data-driven analysis and rigorous due diligence. The company developed proprietary software tools to identify promising Amazon businesses, and used a combination of automation and human expertise to evaluate potential acquisition targets.
Thrasio’s first acquisition was a pet products business called Top Dog Direct, which it acquired in late 2018. The company quickly followed up with several more acquisitions, and by mid-2019 had acquired more than 20 Amazon businesses.
Thrasio’s rapid growth and success in acquiring and scaling Amazon businesses attracted the attention of institutional investors. In early 2020, the company raised $100 million in a Series A funding round led by Oaktree Capital Management, one of the world’s largest alternative investment firms.
Since then, Thrasio has continued to raise significant amounts of funding and expand its operations. In late 2021, the company raised a $1 billion funding round led by Advent International, a global private equity firm. Thrasio has also expanded into international markets, with a focus on Europe and Asia, and has plans to continue to grow its presence on Amazon and other e-commerce platforms.
How does Thrasio work? – Business Model of Thrasio
Thrasio’s business model is built on acquiring successful Amazon businesses and scaling them to generate even more revenue and profits. The company has identified a gap in the market where many Amazon businesses have reached a certain level of success but may lack the resources, expertise, or infrastructure to scale further. Thrasio aims to fill this gap by providing the resources and expertise needed to take these businesses to the next level.
Thrasio’s target market is Amazon third-party sellers with strong fundamentals, such as high revenue growth, solid profitability, and a large customer base. The company typically acquires businesses that are already generating at least $1 million in annual revenue, and aims to grow them to generate at least $10 million in annual revenue. Thrasio focuses on businesses that sell products in categories with high demand and low competition, where there is significant growth potential.
Thrasio has a rigorous due diligence process to evaluate potential acquisition targets. The company uses proprietary software tools to identify promising businesses and evaluates each target based on a range of metrics such as revenue growth, profitability, and market share. Thrasio also evaluates the management team and the quality of the products being sold to ensure they align with the company’s standards.
Once Thrasio has acquired a business, it works closely with the existing management team to identify opportunities for growth and improvement. Thrasio’s team has expertise in areas such as marketing, advertising, operations, and supply chain management, and can help businesses optimize these functions to improve revenue and profitability.
One of Thrasio’s key advantages is its scale. The company has acquired over 500 Amazon businesses, making it one of the largest operators on the platform. This scale allows Thrasio to negotiate better deals with suppliers and service providers, which can improve the profitability of the business. Thrasio also has a large team of experts that can share best practices and help businesses optimize their operations.
Thrasio invests heavily in growth initiatives to scale its businesses. This may involve expanding product lines, entering new markets, and developing new sales channels. Thrasio’s goal is to scale each acquired business to generate at least $10 million in annual revenue.
In summary, Thrasio’s business model is to acquire successful Amazon businesses and scale them to generate even more revenue and profits. The company focuses on businesses with strong fundamentals, such as high revenue growth, solid profitability, and a large customer base, and uses its scale and expertise to optimize operations and drive growth. Thrasio’s success has helped to establish a new industry of Amazon-focused acquirers, and the company has become one of the largest operators on the platform.
Successful acquisitions of Thrasio
Here are some examples of successful acquisitions by Thrasio:
Maxboost: In February 2021, Thrasio acquired Maxboost, a leading seller of phone accessories on Amazon. Maxboost had over 2,000 product reviews with an average rating of 4.5 stars and had been growing at a rate of over 100% annually. Thrasio was attracted to Maxboost’s strong brand recognition, loyal customer base, and high-quality products. After the acquisition, Thrasio optimized Maxboost’s listings, expanded its product line, and improved its supply chain, which led to a 35% increase in revenue within six months.
BeauGen: In May 2020, Thrasio acquired BeauGen, a seller of breastfeeding products on Amazon. BeauGen’s products had a high rating on Amazon and a loyal customer base. Thrasio saw the opportunity to expand BeauGen’s product line and improve its supply chain. After the acquisition, Thrasio invested in new product development, improved the sourcing and manufacturing of BeauGen’s products, and expanded its sales channels. These efforts led to a 40% increase in revenue within six months.
The Good Stuff: In July 2019, Thrasio acquired The Good Stuff, a seller of natural and organic products on Amazon. The Good Stuff had a strong brand reputation and a loyal customer base, but had not been optimized for growth. Thrasio saw the opportunity to expand The Good Stuff’s product line and improve its marketing and operations. After the acquisition, Thrasio introduced new products, optimized listings, and invested in marketing campaigns. These efforts led to a 50% increase in revenue within six months.
Soho Designs: Thrasio acquired Soho Designs, a seller of baby products on Amazon, in December 2020. Soho Designs had a popular brand of diaper bags and had been growing rapidly on Amazon. Thrasio saw the opportunity to expand Soho Designs’ product line and improve its supply chain. After the acquisition, Thrasio introduced new products, optimized listings, and invested in marketing campaigns. These efforts led to a 30% increase in revenue within six months.
Zulay Kitchen: Thrasio acquired Zulay Kitchen, a seller of kitchenware and gadgets on Amazon, in October 2020. Zulay Kitchen had a loyal customer base and high-quality products, but had not been optimized for growth. Thrasio saw the opportunity to expand Zulay Kitchen’s product line and improve its marketing and operations. After the acquisition, Thrasio introduced new products, optimized listings, and invested in marketing campaigns. These efforts led to a 50% increase in revenue within six months.
Baby Merlin’s Magic Sleepsuit: Thrasio acquired Baby Merlin’s Magic Sleepsuit, a seller of baby sleep products on Amazon, in October 2019. Baby Merlin’s Magic Sleepsuit had a popular and highly-rated product, but had not been fully optimized for growth. Thrasio saw the opportunity to expand Baby Merlin’s Magic Sleepsuit’s product line and improve its operations. After the acquisition, Thrasio introduced new products, optimized listings, and invested in marketing campaigns. These efforts led to a 60% increase in revenue within six months.
In summary, Thrasio has a proven track record of acquiring profitable Amazon businesses, optimizing their operations, and scaling them to generate even greater revenue and profits. The company’s expertise in due diligence, operations, and growth has enabled it to identify promising targets and execute successful acquisitions. Thrasio’s success in the Amazon marketplace has established it as a leader in the industry of Amazon-focused acquirers.
Growth of Thrasio over the years
Thrasio’s growth can be measured in various key performance indicators (KPIs) over the years. Here are some of the KPIs that have demonstrated Thrasio’s significant growth:
Revenue: Thrasio’s revenue has grown rapidly since its founding. In 2018, the company had zero revenue. In 2019, the company generated $20 million in revenue, and by the end of 2020, Thrasio’s revenue had grown to over $500 million.
Brands in Portfolio: Thrasio has been rapidly acquiring Amazon businesses since its inception, and the number of brands in its portfolio has grown correspondingly. In 2019, the company had just one brand in its portfolio, Baby Merlin’s Magic Sleepsuit. By the end of 2020, Thrasio had acquired over 100 Amazon businesses and had hundreds of brands in its portfolio.
Employees: Thrasio has also experienced significant growth in its workforce. In 2018, the company had just two employees (its co-founders). By the end of 2020, Thrasio had over 1,000 employees, and by the end of 2021, the company had over 1,500 employees.
Valuation: Thrasio’s rapid growth has led to a significant increase in its valuation. In 2020, the company was valued at over $1 billion, and by the end of 2021, Thrasio’s valuation had grown to over $3 billion.
Profitability: Thrasio’s focus on acquiring profitable Amazon businesses has also contributed to its growth in profitability. The company has a track record of acquiring businesses that generate significant cash flow, and it has been able to leverage economies of scale to improve profitability across its portfolio.
In summary, Thrasio has demonstrated significant growth in various KPIs, including revenue, brands in portfolio, employees, valuation, and profitability. These metrics reflect Thrasio’s success in executing its strategy of acquiring and growing profitable Amazon businesses.
Funding of Thrasio over the years
Thrasio has raised a significant amount of funding since its founding in 2018. Here is an overview of the company’s funding rounds over the years:
Seed Round: Thrasio raised $1.7 million in seed funding in August 2018. The round was led by Peter Bordes of Kubient and included participation from other angel investors.
Series A: In January 2019, Thrasio raised $20 million in a Series A funding round led by Peak6 and WTI and, with participation from Greycroft, Ken Seiff of Beanstalk Ventures, and others. This funding was used to acquire its first Amazon business, Baby Merlin’s Magic Sleepsuit.
Series B: In August 2020, Thrasio raised $110 million in a Series B funding round led by Advent International. The round also included participation from existing investors, including WTI, Greycroft, and Peak6 Investments. This funding was used to accelerate Thrasio’s acquisition strategy and expand its team.
Series C: In November 2020, Thrasio raised $500 million in a Series C funding round led by Oaktree Capital. The round also included participation from Advent International, WTI, and Peak6 Investments. This funding was used to further accelerate Thrasio’s acquisition strategy and invest in its technology platform.
Debt Financing: In March 2021, Thrasio secured $650 million in debt financing from JPMorgan Chase and Barclays. This funding was used to finance Thrasio’s ongoing acquisition strategy.
Series D: In September 2021, Thrasio raised $1 billion in a Series D funding round led by Silver Lake. The round also included participation from other investors, including Oaktree Capital and PAG. This funding was used to continue Thrasio’s growth and expansion efforts.
The funding round put the valuation of Thrasio to $5 billion – $10 billion.
In total, Thrasio has raised over $3.4 billion in funding to support its acquisition and growth strategy. The company’s successful fundraising efforts reflect the confidence of investors in its business model and its potential for continued growth in the Amazon marketplace.
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Future of Thrasio
The future of Thrasio looks bright, as the company continues to execute its strategy of acquiring and growing profitable Amazon businesses. Here are some potential growth areas and initiatives that may shape Thrasio’s future:
Expansion into new marketplaces: Thrasio has built a successful business model in the Amazon marketplace, but the company has the potential to expand into other e-commerce platforms, such as Walmart and Shopify. By leveraging its expertise in acquiring and scaling successful online businesses, Thrasio could expand its reach and tap into new growth opportunities.
International expansion: Thrasio has primarily focused on acquiring US-based Amazon businesses, but the company has the potential to expand internationally. Amazon has a significant presence in other countries, including the UK, Germany, and Japan, and Thrasio could leverage its expertise to acquire and grow businesses in these markets.
Investment in technology: Thrasio has developed proprietary technology to help it identify and evaluate potential Amazon businesses to acquire. The company could continue to invest in its technology platform to improve its ability to identify high-quality acquisition targets and streamline the due diligence process.
Diversification of portfolio: While Thrasio has primarily focused on acquiring Amazon businesses in the consumer goods sector, the company could explore opportunities to diversify its portfolio by acquiring businesses in other sectors, such as healthcare, technology, or finance.
IPO: Thrasio has not yet gone public, but the company has been rumored to be considering an IPO. A successful public offering could provide Thrasio with additional capital to fund its acquisition and growth strategy and increase its visibility in the market.
Overall, Thrasio has demonstrated significant growth and success in the Amazon marketplace, and the company has the potential to continue to expand and diversify its business in the future. By leveraging its expertise in acquiring and scaling profitable online businesses, Thrasio could continue to be a major player in the e-commerce industry for years to come.
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