Singapore-based Rainforest is one of the newest entrants in the wave of startups to “roll-up” the small e-commerce brand. Launched in January by alumni of some of Southeast Asia’s top startups, including Carousell, OVO and Fave, Rainforest acquired the Amazon marketplace seller. This is similar to the Amazon-centric approach taken by Thresio, the Brandt Group and Berlin Brands Group, the three most frequent e-commerce aggregators, but Rainforest among the first companies in the space to launch outside of Asia and focus exclusively Is one of On acquiring the brand in the region. It also focuses on household goods, personal care and pet items, with the goal of building an e-commerce version of the group’s Newell Brands, whose portfolio includes Rubbermaid, Sharpie and Yankee Candles.
Rainforest announced today that it has raised $ 36 million of seed funding under the leadership of Nordstar. This includes equity financing of $ 6.5 million and a $ 30 million loan facility from an undisclosed US debt fund.
Co-founder and CEO J.J. Chai, who previously held senior roles at Carousel and AirBnB, told ClearTips that Rainforest raised debt financing (like many other e-commerce aggregators) because it is non-diluted and will acquire about eight. 12 brands sold through Amazon’s B2B service were completed by Amazon (FBA). The startup’s other co-founders are Chief Financial Officer Jason Tan, who held similar roles at OVO and Fave, and Chief Technology Officer Per-Ola Röst, who previously founded Amazon analytics tool provider Seller Matrix and worth seven figures The FBA brand was run.
Rainforest’s portfolio currently consists of three brands, which it acquired for about $ 1 million. The company wants to wait until its portfolio is revealed about which brand it owns, but Chai said they have a mattress brand that is a best seller on Amazon, a cereal manufacturer and Is a kitchenware brand. Focusing on specific verticals will help Rainforest Supply Chain streamline product design and marketing as it enhances its brand.
Amazon’s total gross merchandise volume in 2020 was approximately $ 490 billion. According to Marketplace Pulse, $ 300 billion came from third-party vendors. Thracio and the Brandt Group, which was started by Lazada co-founder and former CEO Pierre Poignant, also acquired Asian brands, but most e-commerce aggregators have so far been traded to American, European or Latin American vendors (such as Mexico City-based Velorio,) is focused on. Which has also increased funding recently. The rainforest will look at vendors in the Asia-Pacific region, including China, Southeast Asia and Australia.
Chai said that about 30% of Amazon’s third-party vendors are located in Asia, and he expects more e-commerce aggregators to launch in the region. “All the material is there and I think it’s only a matter of time when more people find out and solve this problem,” he said. “Everything we’ve seen has worked, and certainly the original creators have noticed the trend, which is an explosion of microbrands.”
Rainforest household items, personal care or pet products look out for FBA vendors who are currently making about $ 5 million to $ 10 million in sales per year, and making a minimum 15% profit margin. Most of its pipeline of potential deals are inbound inquiries. The rainforest can give brands an evaluation within two days. If they are interested in the offer, due diligence usually takes about a month, and sellers receive the first installment of their payment in about 40 days.
The company plans to look at other marketplaces in the future, but is beginning with Amazon because its analytics allow for faster valuations. The rainforest looks at “Three R’s,” or product reviews, ratings, and rankings to see how well a seller is performing. It also wants brands that can expand beyond Amazon to other channels and have unique intellectual property with broad appeal. “We are looking for products that can overtake global markets,” Chai said. “So, for example, none of the jurists cover, a very American kind of thing that is probably less relevant in this part of the world, because our intention is to take these brands to their next level of competence.”
Many brands in Rainforest’s pipeline are run by sole proprietors, who have reached the point where they need to hire a team to move forward, but instead want to exit so they can move on to their next venture To go
“Being able to build a brand of physical goods and build a big business out of that is a relatively new phenomenon. It used to be that you needed a factory, big branding, R&D. Chai said that the disruption of the combination of online advertising, marketplaces and supply chains has created an opportunity where individuals can create brands in the same way that the App Store allowed people to start distributing software was. “Where we play in that trend, there are a lot of microbrands and many will get stuck, so we can give entrepreneurs a way to get out and bring a brand to its full potential.”