In the United States, e-commerce roll-up businesses are very popular. Wonder Brands hopes to be one of these companies for Latin America.Mexico-based AllVP led the closing of $20 million in seed financing. Mountain Nazca participated with CoVenture and Victory Park Capital.Federico Malek and Nicols Gonzalez Luna, co-founders of Wonder Brands, founded the company in January 2021 in order to acquire digital brands within the MercadoLibre or Amazon ecosystems. The company then uses its technology to grow their operations and increase sales. It manages the marketing, analytics and supply chain management as well as working capital. It focuses on companies that deal with home and garden, fitness, beauty, and personal care.MercadoLibre holds a greater share of the market, but Amazon is expanding rapidly in the region, making it a multi-marketplace. Gonzalez Luna explained to TechCrunch that MercadoLibre may hold half of the market but it is more balanced among a variety of platforms. Operation here is more complicated than traditional Amazon sellers because of the diversification. Negotiations are more difficult and require more discussion about your character to gain trust. We will therefore be doing smaller deals, but more lucrative deals than our counterparts in the U.S.Maleks' background is in commerce. He started his career at iunigo.com in Argentina before founding Avenida.com in e-commerce fulfillment. Groupon acquired Avenida.com in 2010. Maleks was then Groupon's regional managing director. Gonzalez Luna was a friend of his. Gonzalez Luna's background included Goldman Sachs, where he was primarily focused on M&A.Michael Breitstein is the principal of CoVenture. He said that his firm has made many investments in the equity and debt sides of ecommerce. He believes Malek and Gonzalez Luna offer a great two-punch with their backgrounds and the ability to raise capital as well as build a platform.Although there is much competition for digitally native companies with revenue levels below $1 million, Malek stated that Wonder Brands will be focusing on larger sellers and operators and has a target revenue of at least $5,000,000. He said that they are using a buy-and-build approach to acquire digitally native companies, rather than the traditional buy and consolidate model that many other roll ups use.The company's approach aims to allow acquired companies to sell across multiple channels. It offers support in four areas: category and brand management, marketing and performance and technology to automate processes such as inventory and logistics. In Latin America, for example, inventory must be consolidated in one warehouse and then divided according to the sales channel, Malek.It is a big business to acquire and scale companies. Hahnbeck Business Systems in London, an ecommerce M&A company that tracks funding to FBA (fulfillment By Amazon) acquirers around the globe, reported that ecommerce roll-up businesses have raised $7.24 trillion in disclosed funding.According to different sources, reports claim that MercadoLibre, a Latin American ecommerce company, has a market capital of between $70 billion- $94.billion. According to Amazon.com, 55% of Amazon.com's units were sold by marketplace merchants. According to Marketplace Pulse estimates, which are based on Amazon disclosures, this accounted for $300 Billion in sales by 2020.Wonder Brands can now invest in seed financing to build a team that will focus on marketing and the support areas. The company currently has 20 employees and plans to double that number in the coming month. This funding will also supplement larger debt facilities the company has available for brands acquisitions. It aims to acquire six to seven brands this year.Malek stated that the company has a target of reaching $55 million in annual revenue by the end. The company will then reach $100 million in annual revenue over the next 12 months. The company is currently operating in Mexico, and plans to start operations in Brazil by 2021.
