Unybrands Closes $25M Seed To Acquire, Scale Online Brands

Buoyed by a $25 million seed investment, unybrands launched an e-commerce platform aimed at acquiring successful fulfillment by Amazon and direct-to-consumer sellers looking to scale.

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Miami-based unybrands was co-founded in 2020 by CEO Ulrich Kratz, Eugen Miropolski and Christian Harnischfeger to buy, build and boost online brands where business owners have reached the limits of their scale due to a lack of operational infrastructure and growth capital.

“It is a great time to be in this business,” Kratz told Crunchbase News. “Growth in e-commerce is going to accelerate more. We are bringing scale to small brands. Customer habits are changing, and they now want small brands and to go by reviews. We can marry that.”

Here’s how it works: Specializing in categories, such as personal care, pet care, household products and juvenile and baby, unybrands provides exit opportunities for entrepreneurs, including cash-upfront deals or long-term partnerships for sellers who wish to stay involved.

After buying the business, unybrands handles everything from consolidating logistics and supply chains to marketing and economics, ultimately expanding the business to new domestic and international markets, product lines and platforms.

“We operate at the sweet spot of consumers’ exploding demands for small and emerging brands,” Kratz said. “We pride ourselves on customer demand, but also help successful entrepreneurs who have realized they reached the limit of scale, either by a lack of financial resources, time or ability. We come in and come up with a plan on how to build their legacy further.”

The seed round is backed by a group of investors, including Nordstar, DIA Management, Nathan Blecharczyk, 166 2nd Financial Services, Day One Ventures, Brian McGrath of Jefferies and Benvolio Group.

In addition to Miami, unybrands has a presence in Berlin, London and Seattle.

Kratz intends to put the money to work into the companies themselves, but also to build its internal infrastructure and team. Though the company intends on moving fast, the startup wants to make the right bets on people and technology, he added.

The company is too new to report any meaningful growth, but Kratz said it has already closed its first deal this month and there are several other deals in the works. Ultimately, he expects to make up to 20 deals in 2021.

“We are working to acquire the right businesses and integrate them onto our platform, as well as continuing to build on the team and technology to be successful,” he added. “We plan to grow the brands on both sides of the Atlantic.”

Similar companies are also attracting investors: Thrasio and Branded Group, two startups that also acquire successful Amazon resellers, separately raised large rounds of new venture funding on Feb. 9 as the e-commerce sector continues to draw intense investor interest.

Thrasio said it brought in another $750 million of financing from a group of existing investors, including Oaktree and Advent International, while Branded, which also consolidates smaller retailers selling on Amazon’s platform, reportedly raised $150 million in a fresh funding round led by Target Global.

Also last week, Win Brands Group, which also acquires brands from marketplaces, said it raised $50 million from Assembled Brands and funds managed by Oaktree Capital Management to grow its platform of consumer brands.

Illustration: Li-Anne Dias

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Top VCs say they want to fund startups that solve retailers' biggest problem — e-commerce logistics

Summary List PlacementThe COVID-19 pandemic has forced all kinds of retailers to double down on e-commerce like never before. 
Even as restrictions on in-person retail have lifted across the US, many consumers are choosing to do more of their shopping online as they keep health and safety top of mind. 
eMarketer analysts have estimated that US online sales would reach $794.5 billion in 2020, a year-over-year increase of 32.4%.
But, businesses were met with some challenges while dealing with the huge influx of online shopping.
Some online retailers struggled to keep inventory in stock, particularly early on in the pandemic. Others began exploring new ways of getting goods into consumers’ hands as delivery networks filled up with packages. 
For venture capitalists looking to fund the next big thing in e-commerce, these bumps in the road spell opportunity.
Insider recently reached out to the top firms investing in e-commerce to get their take on where the sector is headed. Many said they were interested in funding startups that can solve problems for e-commerce businesses looking to scale.  
Read more: The 25 VC firms most active in funding e-commerce startups told us what they’re looking for in an investment — and shared the big bets they’re making for the future
“We believe that the best time to start a company is during times of uncertainty because both the cracks and innovation become more evident in a given sector,” Hans Tung, managing partner of GGV Capital, said. “If e-commerce is growing, then it’s only logical that new demand for infrastructure and analytics will be there.”
He said that the firm is interested in startups that provide “backend logistics, analytics, and operational services such as Flieber,” which helps online retailers manage their supply chain operations. 
He’s also keeping an eye on fintech startups, such as Affirm, that are changing how we pay for goods and services, to be trends in 2021.
Gautam Gupta, a partner at M13, said the firm is “looking for critical, not just nice to have, infrastructure that drives growth for independent sellers.”
He pointed to M13’s investment in Passport as an example, describing the startup as a “software-enabled international shipping carrier for DTC brands.”
“As US-based merchants look to expand their customer base overseas, Passport provides a full-service solution including logistics, duties and tax calculation, insurance and customer service,” he said. “As customers scale their international sales, Passport scales alongside the business.”
Adina Davis, an investor at BoxGroup, added that 2020 saw an “explosion of the Shopify ecosystem,” leading to investment opportunities. 
“We have been eager to make investments into companies that can serve as the infrastructure that supports e-commerce businesses in their growth,” she said. “This can span everything from innovative software solutions, to 3PL and warehousing solutions, to financing solutions, to innovations in the checkout experience, and more.”SEE ALSO: The top VCs funding e-commerce startups share what trends they’re excited to see more of in 2021
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