Top Amazon aggregator Thrasio has filed for bankruptcy in the US to reduce its losses from a massive debt load. The company filed for protection under Chapter 11 of the US Bankruptcy Code and had agreed with lenders to shave about $495 million off its debt load.
"We are taking steps to build on this progress by strengthening our financial position and working with our lenders to support our future success," Greg Greeley, Chief Executive Officer of Thrasio, said in a statement.
Thrasio, which raised billions of dollars and popularised the concept of e-commerce aggregation, has also received commitments from certain unnamed investors for up to $90 million in new financing. If the capital comes through, it will go toward ongoing operations and will enable the firm to keep running brands in its portfolio.
"In particular, the financing will enable the continued operation of Thrasio's brands, support ongoing business operations and provide the company with access to new capital upon emergence from Chapter 11 to support go-forward business operations," Greeley further added.
Thrasio has raised $3.4 billion to date and was even eying going public through SPAC, but the plans were shelved due to a complicated auditing process, CNBC had previously reported.
In 2022, the company also laid off about 20% of its employees and even saw several executives depart, including co-founder Josh Silberstein. That year it named Greeley, a 19-year veteran of
Amazon who oversaw the development of its Prime loyalty programme, as its CEO, succeeding co-founder Carlos Cashman, who remains a member of Thrasio’s board.
During the pandemic, investors pumped billions of dollars — mostly in debt — into startups rolling up popular brands sold on Amazon, betting on the online sales boom. But as people returned to their old consumption patterns, Amazon sales slowed.
As per a report by a Seattle-based company GeekWire, Amazon’s online store sales represented less than 40% of its overall net sales in its second-quarter results of 2023.
According to a document filed with the New Jersey bankruptcy court, Thrasio listed assets between $1 billion and $10 billion, and liabilities between $500 million and $1 billion. According to reports, the company clocked over $500 million in revenues and a profit of $100 million in 2020.
The thrasio-style roll-up marketplace model grew popular in India during 2021 and the space attracted nearly $800 million in equity and debt funding, according to reports. However, due to the slowdown in e-commerce sales, funding has mostly dried up for these aggregators, there’s been a slowdown in acquisitions and there have been clear signs of distress.
Big players in the space like
SoftBank-backed GlobalBees losses spiked two-fold to
₹6 crore in FY23. Meanwhile, its competitor Mensa Brands’ losses also widened during the fiscal and went up from
₹88 crore in FY22 to Rs 214 crore in FY23.
Another player UpScalio became the first Indian e-commerce roll-up firm to lay off 40% of its employees.
