Berlin-based fulfillment by Amazon aggregator Razor Group has confirmed to Tech.eu that it has secured an additional $400 million in funding, with BlackRock and Victory Park Capital upping their existing debt facility, one now totaling $800 million. Since August of 2020, Razor Group has seen, approximately $960 million in investment over the course of 9 rounds.
While it seemed like nary a week went by over the course of 2021 where an FBA aggregator of one shape or another didn’t make the news cycle, 2022 has been a bit of a different story. When asked about the new capital, and why specifically now, a Razor Group spokesperson commented, “As competitive pressure for FBA assets is relaxing, this is a great time to look for high-quality FBA merchants.”
And so it would seem, as the group has confirmed the acquisition of 25 merchants so far this year. However, with an additional $400 million now in hand, one can only wonder if it's not just the merchants that Razor Group is after, but rather, competing aggregators themselves.
One case in point: after raising $125 million in a Series B round in November of 2021, a short six months later, Luxembourg-based competitor that 'finances, acquires, and grows the world’s best digital brands' factory 14, became a Razor Group property. When asked why factory 14, and no other competitor, Razor Group representatives cited, “Portfolio fit, operating leverage, and high-quality talent”.
To their credit, taking on an additional $400 million in debt funding in a market that’s seen the, arguably, industry pioneer, Thrasio announcing a 20% reduction in staff numbers and a changing of the guard at the highest level, is an impressive feat. A feat that’s clearly got a roadmap behind it that's convinced no strangers to risk investors Blackrock and Victory Park to greenlight the request.
Former senior director of acquisitions at Thrasio Jim Mann further explained, "Continued supply chain uncertainty and increased ad spend over revenue. These forces will result in some categories seeing a slow down in top-line sales and almost certain margin compression as brands try to absorb increased costs without passing 100% of the cost on to already nervous consumers."
Whether a strategy of competitor M&A activities or an accelerated purchasing plan is on the table Razor Group representatives declined to comment, noting only that further information will be provided in early August of this year.