I am very very very skeptical about this in a whole host of ways.https://news.crunchbase.com/news/meet-thrasio-a-profitable-startup-that-just-raised-110m-at-a-780m-valuation/ …
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Sure. 1. First of all, just because they raised a lot of money doesn't mean they raised it at favorable terms. See Airbnb for example. 2. This is a red flag. When you have investors OUTSIDE YOUR INDUSTRY, it means you can't find them inside. Theranos is an example.pic.twitter.com/z3EqhOI4Ah
3. Here's the meat of it: there are extremely weak returns to scale on combining these businesses. You cannot take disparate product groups and just roll them up. You get very very very little benefit from doing that on Amazon. You have one warehouse, one marketplace manager?
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That's not enough returns to scale. Further, look at what they're buying: 1) https://www.amazon.com/s?me=A2JSS8JZT2LG97&marketplaceID=ATVPDKIKX0DER … 2) https://www.amazon.co.uk/stores/node/19887595031?_encoding=UTF8&field-lbr_brands_browse-bin=Beast%20Gear&ref_=bl_dp_s_web_19887595031 … (Why are they even in the UK? Good luck thrasio). This is garbage. What is the barrier to entry on this stuff?
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After rolling up all these "brands" they will be a big clunky company. They will get eviscerated by 1) Chinese moving up value chain and going direct 2) nimble owner-operators. They're basically betwen a rock (amazon) and a hardplace (wave of vicious Chinese competition).
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