Berlin Brands Group is one of many e-commerce startups that are trying to create lucrative economies of scale by buying smaller brands and selling on Amazon. They also plan to use technology to scale and manage them more efficiently. The round, which included both equity and debt, was closed by the startup. It will use it in part for its fulfillment and logistics infrastructure and to purchase more companies.
BBG confirmed that this investment, which was one of the largest in the space, boosts its value to more than $1 billion.
Bain Capital will lead the equity portion. It will also buy out Ardian, a former investor, in a deal that separates from the $700 million raise.
This is BBG's second funding round this year. It announced in January that it would invest $302 million from its own balance sheet to finance M&A. In April, it announced a $240 million debt round. The equity component is included in this latest $700 million.
BBG started out by developing its own products, then selling them on Amazon.com. CEO Peter Chaljawski, who was a DJ in his past life, began with an emphasis on the audio equipment he had developed.
It saw an opportunity to diversify it into a larger consolidation play. BBG would also acquire third-party brands and merge them into its business. This allowed BBG to offer owners of third-party businesses an exit route. It was able to bring smaller brands more scale and marketing expertise, as well as more tech to improve their operations' efficiency.
The mix includes 3,700 products from 14 brands, including Klarstein (kitchen appliance), auna(home electronics and music equipment), Capital Sports and Blumfeldt (garden). BBG claims it has access over 1.5 billion customers on e-commerce platforms where it sells goods in Europe and the U.S. It is unique among others in the same market as BBG because it has more channels than Amazon and some 100 in 28 countries.
This list is growing every day and includes many more in the same space. Yesterday, Olsam and Heroes raised $165 million and $200 million respectively. Suma Brands ($150m); Elevate Brands (250 million); Perch (200 million); factory14 (200 million); Thrasio, Heyday, Heyday, The Razor Group and Branded. They are consolidating merchants who sell via Fulfillment By Amazon. \
With more startups entering the market, it will be more difficult for all of them to purchase the best third-party brands. Therefore, Bain's backing should help BBG withstand that competition.
We have reached the next step in our journey to build a global brand house with Bain Capitals' commitment and additional funding, Chaljawski stated. This will allow us to address our strategic goals of developing and acquiring brands worldwide, as well as operational and logistical growth. Bain Capitals global experience with founders will allow us to continue our growth as an e-commerce leader in scaling brands.
BBG is a disruptor in the rapidly evolving consumer goods market. Bain Capital Private Equity's Miray Topay, MD, said that the company's ability to create and scale brands that reflect current consumer trends via their highly efficient ecommerce platform offers it tremendous growth potential in a rapidly-growing market. We have worked with many founder-led management groups and are looking forward to supporting Peter and his team in achieving their goal of being a global leader for consumer e-commerce.
