E-commerce Aggregators Razor and Perch Merge
In a move signaling further consolidation within the e-commerce aggregation sphere, Berlin-based Razor Group has successfully acquired the U.S.-based Perch. This strategic merger is accompanied by a significant fundraising effort, with the company raising over $100 million in capital, bolstering its valuation to a noteworthy $1.7 billion.
Razor Group, headquartered in Berlin, and Perch, based in the United States, are both prominent players in the realm of e-commerce aggregation. These companies specialize in acquiring and consolidating various online retailers, particularly those operating within Amazon’s Marketplace.
The merger between Razor and Perch is coupled with a substantial financial injection, with Presight Capital spearheading the funding round. This infusion of capital amounts to over $100 million, solidifying the combined entity’s position in the market. The enterprise value of the merged business now stands at $1.7 billion, with a manageable debt load of approximately $400 million, not due for repayment for another four years.
Industry Consolidation
This merger reflects a broader trend of consolidation within the e-commerce aggregation sector. Perch, previously engaged in acquiring Web Deals Direct, had been actively seeking a buyer for some time. Meanwhile, Razor Group has been steadily acquiring smaller aggregators like Stryze and Factory 14, aligning with the overarching trend of industry consolidation.
The announcement of Razor and Perch’s merger comes in the wake of Thrasio’s recent Chapter 11 filing, despite having raised substantial funding prior. While Razor and Perch share some investors with Thrasio, they maintain that they were not aware of the extent of Thrasio’s financial challenges.
Following the merger, investors backing Perch will hold approximately one-third of the shares in the combined entity, with Razor’s backers claiming the remaining two-thirds.
Future Outlook
Despite facing obstacles in integrating operations and unifying platforms, e-commerce aggregation models continue to attract investor interest. Tushar Ahluwalia, CEO and co-founder of Razor Group emphasizes the company’s founder-led approach and customer-centric focus as key differentiators in navigating industry complexities.
Razor and Perch merge and receive funding, becoming strong contenders in e-commerce aggregation with the potential for further growth and market leadership.
