E-commerce roll-up business heats up with 10club raising $40 million in seed funding

The e-commerce roll-up business in India is warming up with 10club, one of the early movers in the space, raising $40 million in one of the country’s largest seed rounds to e-commerce roll-up brands.

An e-commerce roll-up business typically acquires, operates and grows profitable, digital-first businesses that reside on marketplaces such as Amazon and Flipkart.

The funding round was co-led by Fireside Ventures and an international investor active in the space. The round also saw participation from HeyDay, a leading player in the roll-up space, PDS international, Class 5 Global, Secocha Ventures led by Sanket Parekh, boAt founders Aman Gupta and Sameer Mehta (in their individual capacity) and other global strategic investors.

Last month, former CEO of Myntra, Ananth Narayanan’s new e-commerce roll-up venture Mensa Brands, raised $50 million in a Series A round led by Accel Partners, Falcon Edge Capital, Norwest Venture Partners. Firstcry’s e-commerce roll-up venture, Global Bees has a capital commitment of $75 million from investors including Premji Invest, SoftBank, TPG and ChrysCapital. While Narayanan plans to invest in 50 plus high growth, EBITDA profitable brands with revenues of ₹10 crore -70 crore per annum, Global Bees is looking to invest $2 million - $6 million each in over 30 brands. G.O.A.T Brand Labs founded by former Flipkart Fashion Head, Rishi Vasudev and Evenflow founded by former Uber executive, Utsav Agarwal, are some of the other new e-commerce roll-up ventures.

All these new ventures are inspired by the US-based, Thrasio model. Thrasio, the world’s largest buyer of top-reviewed, bestselling brands on Amazon, buys the brands from the small business owners and helps scale those brands exponentially. Founded in 2018, Thrasio is the fastest company to get to a billion dollar revenue and a multi-billion dollar valuation in the US.

Bhavna Suresh, co-founder and CEO, 10club said “Early stage, digitally native brands often find it challenging to scale beyond a particular revenue threshold and their growth plateaus due to increased competition and dearth of funding opportunities. They lack the resources to invest in technology, marketing, optimisation tools, supply chain expertise and skilled human resources. This is where 10club steps in. With our centralized platform model featuring market experts in-house, tech, processes and playbooks, 10club unlocks 10X growth for these businesses and helps them achieve scale.”

The last couple of years have seen the advent of many entrepreneurs who have built sustainable businesses on the back of marketplaces like Amazon which has 8.5 lakh sellers and Flipkart which has 3.5 lakh sellers; the accelerated adoption of e-commerce by the Indian consumer especially after the outbreak of COVID-19 has further strengthened these businesses.

“India and online-first brands are at the cusp of the next revolution. We, at Fireside, believe that both VC and acquisition driven model will co-exist going forward and can turbocharge the growth of early-stage brands. Together with the team at 10club, we will be able to drive this change and enable e-commerce entrepreneurs to realize the full potential of their brands” said Vinay Singh, Partner, Fireside Ventures.

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