BlackRock leads $100M round for Cap Hill Brands; e-commerce vets acquire 35 brands, add key execs

Cap Hill Brands, a Seattle-based e-commerce company founded and run by industry veterans Jason LeeKeenan and Kevin Saliba, has raised more than $100 million in a Series B round led by investment giant BlackRock.

The company, founded in 2020, has acquired nearly 35 brands and grown to more than 200 employees. The idea is to supercharge each brand with centralized operations, technology infrastructure and management — creating what LeeKeenan and Saliba describe as a next-generation consumer packaged goods company.

Cap Hill Brands is also building out its executive team, including three recent additions:

  • Greg Revelle, chief commercial officer, formerly chief marketing officer for Kohls and Best Buy.
  • Susan Coskey, chief people officer and general counsel, former chief people officer for Holland America Group and director of the City of Seattle’s Department of Human Resources.
  • John McKeon, chief financial officer, former vice president of financial planning and analysis for Carvana.

In addition, Cap Hill Brands last year acquired technology company DemandHelm, a technology marketing company led by a former Amazon engineer, Sarang Fegde, who is now chief technology officer for Cap Hill Brands.

Cap Hill Brands also hired a chief supply chain officer, Paul Leslie-Smith, an industry veteran who has helped the company navigate the challenges of the past year and avoid the severe shortages that plagued the sector.

Many of the brands acquired so far offer products for families and kids, including CreativeQTGrabeaseMarble GeniusGirlZone, and Tickle & Main. Both founders were previously executives at Zulily, among other past roles.

The new equity round will fuel additional growth and provide capital for further acquisitions. In addition to BlackRock, prior investors Version One VenturesMaveron, and Ascend participated in the Series B round. Cap Hill Brands is not disclosing the valuation placed on the company as part of the round.

The funding brings the total amount of debt and equity raised by the company to date to more than $250 million.

Cap Hill Brands emerged on the scene as “Amazon aggregators” acquired third-party sellers at a record pace, seeking to capitalize on the unprecedented growth in online sales in 2020 and 2021. That trend has shifted as the pandemic has waned. U.S. e-commerce sales rose 2.7% sequentially in the second quarter, compared to more than 30% two years ago.

While there are some similarities, LeeKeenan and Saliba, co-founders and co-CEOs of Cap Hill Brands, don’t consider their company an Amazon aggregator in the stereotypical sense.

Among other differences, they’re thinking long-term and being more thoughtful about the integration of acquired brands. While they always acquire 100% of a brand, they’re flexible in how they structure deals. For example, they’re open to the idea of an entrepreneur continuing working with Cap Hill Brands after an acquisition, or moving on.

They’re also expanding sales beyond Amazon to other e-commerce sites and third-party marketplaces including Nordstrom, Target, Walmart, Kohl’s, Chewy, and Wayfair.

“At the core, we think of ourselves as a next-generation CPG company, and our mission is really to help grow these brands,” said LeeKeenan, who was a senior vice president at Zulily and later sold Seattle startup TraceMe to Nike.

The underlying idea, he said, is to acquire and operate brands with sustainable competitive moats that can live across multiple e-commerce channels and platforms.

From an economic standpoint, Saliba said he and LeeKeenan were able to keep each other disciplined as valuations and acquisition prices for consumer brands climbed at the peak of the roll-up frenzy.

“Overall, we stayed pretty lean and mean through 2021. And that’s allowed us to emerge in 2022 as a much healthier company,” said Saliba, the former Zulily CMO, who previously sold Seattle startup ImageKind to CafePress.

Like many companies born in the pandemic, Cap Hill Brands operates entirely virtually, without a physical headquarters. They’re flying everyone in later this month for a company gathering in Bellevue, Wash., where some members of the team will meet in person for the first time.

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