UpScalio, an e-commerce roll-up company, said it has scooped up $42.5 million in Series A funding, highlighting the new investor rush towards the Thrasio style-business model in India.
The UpScalio financing round was led by Presight Capital and an undisclosed global hedge fund, with participation from Heliad Equity Partners, MPGI, 468 Capital, Whiteboard Capital. It also saw capital commitments from freshly minted unicorn OfBusiness, Innoven Capital and Alteria Capital.
UpScalio said it has built a team of over 50 specialists across functions with experience scaling successful e-commerce companies in India and is expecting to take that number up to 100 by the end of the year.
The Thrasio model – an investor favourite
The model, where a company acquires and scales third-party brands (D2C) that sell on e-commerce marketplaces such as Amazon and Flipkart has been a clear investor favourite, with recent rounds including GlobalBees, Mensa Brands, GOAT Brand Labs and 10club that have collectively mopped up $276 million in the past couple of months.
According to experts tracking the segment, all these Thrasio-style companies acquire cash flow positive brands, but instead of acquiring the whole company, they structure it as an asset sale. Debt is then used to service the deal terms.
Key players and their funding rounds
Among the other e-commerce roll up players, FirstCry-backed GlobalBees broke all records by raising $150 million (half equity and half debt) in its maiden round whereas Mensa had announced $50 million worth of funding in a mix of equity and debt financing.
In July, GOAT Brand Labs had scooped up $36 million in its maiden institutional round from Tiger Global Management, Flipkart Ventures and Mayfield. Before that, the Bhavna Suresh-led 10club raised $40 million in its seed round whereas Powerhouse91 scooped up two undisclosed rounds in January and July.
Interestingly, both Alteria Capital and Innoven Capital had also participated in Mensa Brands’ $50 million Series A fundraise in May. And according to Entrackr’s sources, the two along with some others would invest $25 million in debt in the company.
Investors see value as they believe a long runaway lies ahead of e-commerce firms, and the market will be strong for early movers that can acquire the right brands and partnerships early.