With SPAC merger on hold, Thrasio raises $1 billion to buy more Amazon sellers

Thrasio, an aggregator of Amazon products, has raised more than $1 billion in a private funding round led by technology investor Silver Lake.Jason Alden/Bloomberg

Thrasio, a Boston-area company that buys consumer brands on Amazon, said it raised $1.075 billion in a bid to become an even bigger player in the online aggregation sector.

It’s the second-largest venture capital round raised by a private Massachusetts-based startup, following the record $1.2 billion round by Waltham health insurance startup Devoted Health announced a few weeks ago.

The funding round comes after Thrasio’s potential merger with a special purpose acquisition company was shelved amid the departures of top executives, as first reported by CNBC this month. Thrasio held SPAC merger talks with Michael Klein’s Churchill Capital Corp. V, a deal that would have taken the company public at a $2 billion valuation, Bloomberg News reported.

Among the departures, Thrasio cofounder Josh Silberstein resigned as co-chief executive in September, leaving cofounder Carlos Cashman at the helm of the company. Cashman called the departure a “natural evolution,” and he said the company decided to raise venture capital instead of going public because the “private market has continued to provide us with [an] ample amount of capital.”

Thrasio president Danny Boockvar said in a statement that the company is not in active discussions about a SPAC merger or initial public offering, but that the company is “always looking for the best ways to grow.”

Investor money has been pouring into the online aggregation market during the pandemic amid a boom in online shopping. Walpole-based Thrasio has raised more than $3.4 billion since it was founded in 2018, and Boston’s Perch, a competitor, raised a $775 million round in May, bringing its total venture haul to about $900 million.

E-commerce aggregators like Thrasio and Perch buy brands that sell anything from straws to champagne flutes to leggings online, with the goal of boosting sales with their technology, marketing, and logistics know-how. Research firm Marketplace Pulse found that about 80 companies are in the Amazon aggregator business, with Thrasio and Perch sitting in the top three based on the amount of money raised from investors.

The competition to buy more brands is heating up. In September Thrasio announced its three largest acquisitions to date: More than $100 million for sellers of mattress protectors, camping equipment, and bedding. Thrasio says it owns more than 200 brands, and Perch says it owns more than 70, according to their websites.

Still, the companies control a small share of the Amazon marketplace. In a report published last week, the e-commerce giant said it added more than 200,000 new sellers to its platform in 2020 alone, up 45 percent from the previous year.

Thrasio, which said it has evaluated more than 6,000 online businesses, said it looks to buy already-successful brands that have the potential to grow. Cashman said Thrasio’s “business is getting better as it gets bigger,” and he expects the company to reach $1 billion in revenue.

Sources told CNBC that the company put its SPAC deal on hold to resolve issues with its financial audits. Former Thrasio chief financial officer Bill Wafford, a veteran of J.C. Penney and Walgreens, left the company in July, three months after joining.

Silver Lake, a new investor in Thrasio, was joined in the latest round by previous investors including Advent International, Upper90, Oaktree Capital Management, and Peak6. The deal valued Thrasio at more than $5 billion, according to a person familiar with the matter. (The company’s last private funding round was in July 2020, when it was valued at $1 billion.)

Thrasio said it will use the funds to buy more online brands and expand into new markets, including India. According to its website, the company has 70 open roles between Walpole and Boston, and another 200 open globally. Boockvar said the company employs about 1,000 people, with about half based in Massachusetts.

Material from Bloomberg was used in this report.