One of the bigger startup buying up and consolidation of third-party Amazon sellers has come to an end. According to sources, the company, which was valued at between $5 billion and $10 billion last year, is going to be laying off a lot of employees this week. Today, it was announced that Greg Greeley, a former president of Airbnb and an Amazon executive, will be taking on the role of CEO of the company in August.
Carlos Cashman will remain on the board as a director.
The layoffs and new CEO appointment are the latest developments in a series of ups and downs for Thrasio in the last six months that underscore some of the challenges in the aggregation business model.
Josh Silberstein, who was co-CEO with Cashman at the time of the $100 million raise, told TechCrunch that the company was considering a public listing.
The SPAC idea started to take shape over the summer, and could be worth as much as $10 billion. The new CFO left in July, just three months after joining, and Silberstein left the company in September due to problems that arose during a financial audit.
At the end of the month, it was announced that it had raised $1 billion from Silver Lake.
An email is doing the rounds, which is said to be looking for investors in the company via a special purpose vehicle. We have not been able to confirm if the email is legit.
Thrasio, the Amazon aggregator, raises $1B in fresh funding at a valuation of up to $10 billion
The layoffs are not fake. We were shown an internal memo that explains how the rumors will be carried out, and we were also told that people will be getting informed over the next two days.
The company said in the memo that it made the decision to reduce the size of the team, but it has not said how many employees will be affected.
The layoffs will be part of a bigger reorganization. In a memo to employees, Cashman and Boockvar wrote that the company would need to make certain changes in order to stay on its path.
It is not an easy decision, especially within a culture that is shaped around community and sharing.
The memo states that employees who are let go will receive a number of benefits, including sabbatical, healthcare, job support, and accelerated vesting of some of their options. Their last day of work will be May 13.
Cashman and Silberstein founded the company to take advantage of a very Amazon-like economy of scale: the Amazon Marketplace has millions of businesses and brands selling on it and there is a business to be built in bringing some.
The businesses would be picked up by Thrasio, which would invest in tech to run them better and more profitable as e-commerce operations, both on Amazon and potentially outside of it.
It raised nearly $3.4 billion in funding to build out its business, acquiring hundreds of brands, with investors including the likes of Silver Lake, Advent International, Oaktree, Upper90, and more. When it raised $1 billion in October, it was buying businesses at a rate of 1.5 per week and had hundreds of brands in its portfolio.
Dozens of other Aggregators followed in the wake of Thrasio's wake, raising some$15 billion in capital to fuel their ambitions. It was a top-five seller on Amazon.
Thrasio raises $100M for its Amazon roll-up play, appoints retail CFO for its next steps
It's not clear why a financial audit would have stopped SPAC last year, but it speaks to some of the challenges of running a business and accounting for it when it's evolving at a fast pace.
It sounds like a great idea to consolidate repetitive processes across multiple retailers.
Silberstein told me last year that when you get into that price range, it gets hard to grow your business and manage it. We observed that the great companies had reached a point where they couldn't keep doing what they were doing because of a lack of capital. If we acquire a few of these, we would have the scale to build the best breed supply chain, marketing and so on. We would fix it.
In reality, Thrasio has been building a business that spans a number of different consumer categories. It can be difficult to integrate even similar businesses.
Aggregators generally position themselves as solving those issues with tech, but in some cases, they are not building as much technology as you might think: they are buying in third-party tools to help with fulfillment and more.
The move to bring in Greeley, who ran the global Prime program at Amazon, suggests that the company wanted a more seasoned executive at the helm to keep its long-term strategy on the right path.
Cashman has been dealing with another controversy. Cashman is being sued by an investor who left the founding fund to join Cashman in a new venture capital firm. She is seeking damages, including for work she says she did over a six-month period, after she was dismissed from the firm.
In the joint memo to employees, Thrasio said that they need to take the time to properly absorb and grow the businesses they have acquired.
They went on to say that the company's M&A team would be able to handle acquisitions and integrate them into the company's processes.
The owner of hundreds of big-selling e-commerce brands is likely to continue. The big question is whether it continues as a single entity under Greeley, or whether it takes a course of rationalizing its investments and acquisitions.
Four years ago, the innovative team at Thrasio created an entirely new way for this community of entrepreneurs to achieve their business goals and see the reach of their products expand.
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