With the burgeoning European market, Amazon aggregator Razor Group is set to acquire smaller rival Factory 14. In sum,
- Amazon aggregator Razor Group is on the verge of acquiring smaller rival Factory14
- The 100-person strong workforce at Factory14 is set to join the Berlin-based aggregator
- An acquisition deal worth a double-digit million-dollar amount in the wake of European market consolidation
Razor Group is a Berlin-based Amazon aggregator that reached a $1 billion valuation in November. The aggregator counts US asset manager BlackRock among its supports as it looks to pay a double-digit million-dollar amount in the acquisition deal of the Luxembourg startup, Factory14.
When the market started to gain traction after the pandemic, aggregators’ appetite to buy top-performing sellers on Amazon exploded. Companies in the sector have already raised nearly $15 billion with the trend expected to continue.
Razor was founded in 2020 and quickly hit unicorn status in 2021 after raising $125 million. Its equity backers include 468 Capital and Victory Park Capital. With the Factory14 acquisition, the aggregator’s headcount will be boosted to 500 people, bringing its stable of brands to over 150 across 90 merchants.
According to a spokesperson for Razor Group, Factory14 raised $200 million in a mix of debt and equity in May. Although the company is registered in Luxembourg. Most of its operations are based in Madrid, Spain. With this deal, all of Fatory14’s 20 brands will be acquired, including US-Based Kettlebell Kings, UK-based Pro Bike Tool, and CrossFit brand tribe WOD. Prior to the acquisition, Factory14 had already built a well-performing portfolio and attracted top-tier talent.
The speed of execution and operating performance of the Razor Group have allowed it to kick off global market consolidation in the FBA aggregator space. The aggregator understands the importance of scale in succeeding in the fast-paced sector, both from a fundraising and operational perspective. Instead of raising more cash to battle it out in the competitive market, Factory14 chose to be acquired by a larger platform that will make it more competitive.
The move by Razor to acquire Factory14 is a sign of the consolidation trend that is taking root in the European market post-pandemic. This is after a $13 million funding round by Swiss startup Flummox that aims to differentiate itself by going earlier down the chain for larger aggregators. London-based aggregator Olsam also acquired a smaller US competitor in 2021.
The aggregator acquisitions in Europe are taking shape as the economy booms. In the second half of 2021, aggregators reach a record highest with over $1 billion being raised by European startups in the sector. Olsam secured $164 million, UK startups Heroes $200 million, and Germany’s Berlin Brands Group $700 million from investors.