Axios Pro: Retail Deals

February 01, 2022

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Good morning, Retail readers!

Situational awareness: Fashion group Zegna said revenue was up 27% year over year, another sign of strong luxury demand.

1 big thing: Valuing Amazon aggregator Acquco

Illustration of dozens of Amazon packages parachuting from the sky.

Illustration: Aïda Amer/Axios

Acquco, an acquirer of third-party sellers on Amazon, is said to be finalizing a second round of funding.

Why it matters: After securing a $160 million series A consisting of debt and equity last March, the company tells me this next round (also debt and equity) will be even bigger.

  • The company declined to comment on its valuation.

My thought bubble: Looking at Thrasio, a peer, we can ascribe a rough valuation of a bit more than $2 billion to Acquco. That's based on Thrasio's 5x revenue valuation of $5 billion.

Details: Initially, the plan was to announce the series B by the end of the year, a spokesperson said, but the amount of interest exceeded expectations.

What's next: Proceeds will largely go toward M&A, though a portion will be invested in omnichannel efforts and entering new markets.

  • While the company buys businesses across a range of categories, its primary focus is on the home and kitchen, plus pets.
  • Targets have sales of at least $3 million annually.
  • Acquco avoids fads, for example, fidget spinners, and heavily seasonal businesses such as Christmas trees, as well as those with high obsolescence risk, such as phone cases.

By the numbers: Acquco tells me it generated revenue of $420 million in 2021, which includes $170 million in sales from 40-plus acquisitions under Letters of Intent.

  • By comparison, the company raked in more than $100 million in revenue in 2020, its first year in business.
  • Revenue this year is expected to nearly double to $800 million.
  • Acquco said its top Amazon brands grew 150% year over year, while its brands overall grew 60%, also year over year.
  • EBITDA, the company claims, was $90 million last year, a more than 2,000% increase versus 2020.

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