Exclusive: Society Brands plans Series B capital raise
Illustration: Aïda Amer/Axios
Society Brands, an e-commerce aggregator, plans to raise a Series B in the tens of millions of dollars, CEO Michael Sirpilla tells Axios exclusively.
Why it matters: The raise comes at a time when reports indicate aggregators could face a number of operational and financial challenges this year, prompting consolidation.
Yes, but: Society Brands is still fairly young in its lifecycle, making its first acquisitions last year, instead of during the frenzied, less-disciplined dealmaking environment in 2021.
Details: Sirpilla declined to disclose the exact dollar amount, but said Society Brands hopes to capitalize on existing investor interest to buttress the company's balance sheet.
- Proceeds will go toward building out Society Brands' technology and hiring.
- The company's current headcount of 65 could increase by 50% or perhaps up to 100% by the end of the year, he says.
Catch up fast: Society Brands has raised about $220 million in debt and equity to date, including a $204 million Series A completed a year ago, followed by a $13 million raise supplemental to that round, Sirpilla says.
What's next: The company plans to complete several acquisitions within the coming months.
- Society Brands targets online sellers of products with individual product price points between $20 and $30.
- Ideal acquisition targets generate between $1 million and $20 million, with profit margins between 15% and 25%, as Axios previously reported.
- Society Brands aims to acquire a dozen or so brands per year in product categories like home and kitchen, sports and outdoors, health and personal care, children's products, consumer electronics and apparel.
Of note: SenaHill Partners has served as Society Brand's investment bank, helping it to raise its previous rounds, Sirpilla says.
- Down the road the public markets may make sense for the company, he adds.
Be smart: Valuations for third-party sellers have declined on average from between 4x and 6x EBITDA last year, to between 2.5x and 4.5x this year, Sirpilla says.
