Perch Raises $775 million, Buying Amazon Retailers

Authored by Margherita Beale of Forbes

Perch landed $775 million of investor funding that will make the 18-month-old startup one of the best-funded players chasing the booming business of rolling up small retailers that are crushing it on Amazon and other online marketplaces.

The funding for the Boston-based business is the largest ever Series A raised by a consumer packaged goods company, according to Crunchbase, and almost four-times larger than the record set by Chinese online used goods trading marketplace Zhuanzhuan in 2017. The round was led by SoftBank Vision Fund 2 with participation from Spark Capital, and brings the company’s total funding to date to over $900 million.

“We are building the next-generation consumer products company,” said Chris Bell, founder and CEO of Perch, echoing the objectives expressed by the market leader in Amazon rollups, Thrasio, in a Forbes profile last year. The newfound appeal has the former Bain & Company and Wayfair executive relishing in the sudden rush of interest from investors. “The reception I got was a little bit like a Nigerian prince scam,” he says of his early pitch meetings.

The funding will be used to acquire new businesses, add staff and develop its technology platform, which Spark Capital General Partner Alex Finkelstein says is a primary reason for the investor interest. Perch’s proprietary software helps them identify viable targets and grow them once acquired by expanding their advertising efforts, setting more dynamic pricing, and managing their supply chains. According to Bell, 25% of Perch’s 70-plus employees are software engineers.

Perch is one of the growing number of challengers chasing the business of buying up third-party sellers that have a proven track record online, particularly on Amazon, which in the first quarter reported that nearly 55% of the products it sold were from third-party sellers. More than 50 firms looking to buy those sellers have attracted over $4 billion in capital since April of last year, according to Marketplace Pulse.

Bell says the business has been profitable since its founding in November 2019 but would not disclose any financial information. Last year, Thrasio generated over $100 million in profits on $500 million in sales, according to the company. Thrasio had assembled a portfolio of more than 100 brands in 2020 and was purchasing an average of two to three new companies per week in February, when it closed another $750 million of funding.

Perch boasts 70 brands in its stable of third-party sellers, including women’s athleisure brand Satina, teeth whitener Cali White and kitchenware from Flathead. Perch has acquired more than two brands a week on average so far in 2021. While it primarily sells its products through Amazon, Bell says they are expanding into brick-and-mortar channels, as well as other online marketplaces like those operated by Walmart and Target.

“The company is growing incredibly fast, much faster than we could ever imagine,” says Spark’s Finkelstein. “We were fortunate to back companies like Twitter, Wayfair and Slack in the early days. This is the fastest growing company in the history of Spark.”

Read More

DC Attorney General Files Antitrust Lawsuit Against Amazon

Authored by Tyler Durden of ZeroHedge

Amazon shares skidded to session lows just before noon ET on Tuesday after Washington DC’s Attorney General Karl Racine unveiled a new anti-trust lawsuit against the e-commerce giant, alleging that the company’s practices have unfairly raised prices for consumers while suppressing competition and innovation.

Read the complaint here:

As a result, the lawsuit is seeking to end Amazon’s use of allegedly illegal price agreements to edge out competitors, recover damages and impose penalties. The lawsuit alleges that Amazon’s conduct made it virtually impossible for third-party sellers to offer goods at a better price than Amazon.

Washington DC AG Karl Racine

The lawsuit, filed in Washington DC Superior Court, alleged that Amazon illegally maintained monopoly power by using contract provisions to prevent third-party sellers on its platform from offering their products for lower prices on other platforms. The attorney general’s office claimed the contracts create a “an artificially high price floor across the online retail marketplace,” according to a press release. The AG claimed these agreements ultimately harm both consumers and third-party sellers by reducing competition, innovation and choice.

Until 2019, Amazon included a clause in its third-party seller agreement that they couldn’t offer goods on Amazon at a higher price than they were offered on other third-party platforms. Amazon eventually removed that provision amid growing anti-trust scrutiny.

The lawsuit comes as state AGs and the DoJ filed antitrust lawsuits against Google and Facebook; Amazon is also reportedly in the sights of federal regulators. But Tuesday’s action comes from Racine’s office alone.

Racine said on a call with reporters on Tuesday that the central focus of the lawsuit – contracts known as “most favored nation” agreements – was something that he felt should be taken on independently due to the sheer amount of work involved in bringing these types of lawsuits.

Read More

First unmanned, cashless store powered by AI and robotics in Singapore | Video

Authored by Alif Amsyar of

A local tech firm, Viervlak, has brought an automated convenience store to Jurong West, the first in the heartlands. Another 17 such stores, which sell essentials around the clock, are expected to be rolled out across Singapore by the end of the year.

Ray Chang, Director, Viervlak is interviewed in the video from CNA.

Ray Chang, Director, Viervlak

Read More

Google and Shopify Expand Partnership to “Democratize” Ecommerce

Authored by Nina Wolpow of Forbes

Google introduced new features and an expanded partnership with Shopify aimed at grabbing a bigger piece of a booming e-commerce business in the face of Amazon’s increasing success at winning a greater share of the market for searches by online shoppers.

Bill Ready, Google’s President of Commerce and Payments, announced the expanded partnership at the company’s I/O developer’s conference Tuesday as part of a plan to “democratize” online shopping. Shopify shares rose more than 3% after the announcement. Google slipped about 1%.

“When it comes to shopping, what we’re really trying to build out and support is a free and open commerce ecosystem, “ Ready tells Forbes. “This is really important for consumers to have choice, and especially for small and mid-sized businesses to be able to participate in the rise of digital commerce as well.”

At the heart of Ready’s strategy is the reintroduction of free listings—which he introduced in April 2020—onto the Google Shopping platform, and an expanded partnership with Shopify and its network of 1.7 million retailers. Users are already engaging with Google’s shopping features more than one billion times per day, he says, which represents an untapped universe for the search giant— Google remains a minor player in a business that rose to $861.12 billion in the U.S. last year, according to Digital Commerce 360.

Ready describes Google Shopping as a platform rather than a retailer or marketplace. It is designed to help people “discover, learn about and shop for the products they love—whether those products come from a big-box retailer, new direct-to-consumer brands or the mom-and-pop shop down the street,” he wrote in a blog post sent to Forbes before the I/O announcement. 

Formerly COO at PayPal and CEO of Venmo and Braintree—which PayPal acquired in 2013— Ready began shifting the company’s strategy within months of joining Google in January 2020, just as the pandemic was set to trigger a digital shopping explosion that McKinsey says created a 10-year leap forward in e-commerce adoption over the period of three months. That included the move to shift Google Shopping away from its “pay-to-play” ad model by opening free Shopping listings to all merchants as online retailers. 

“The primary place where Google and Amazon are different is when it comes to advertising. Google has literally been doing this for 20 years now. It’s a significantly more advanced product…but Amazon is very quickly catching up,” said Brian Roizen, cofounder and chief architect at Feedonomics, a platform that helps large brands and retailers (including Amazon, Walmart, and Target) manage and optimize their product listings.

Amazon does not disclose its advertising sales specifically, but its Q4 earnings report included a nearly $7 billion “other” category, part of which is advertising revenue. 

Google won’t see any revenue from the free ads and instead hopes that massive collection of users will attract merchants, who in turn will attract more users to the service. While it is not an online retailer in the traditional sense—it does not have or control inventory—Google Shopping mimics one with categorized listings, promoted suggestions based on past behavior, shopping cart and “Buy on Google” feature. 

All of this is likely designed to leverage Google Ads, which brought in $147 billion for Alphabet last year, more than half of all online ad spending in the U.S. That dominance is being hacked at by Amazon, which grew its share of the spend to 19% last year, up from 13.3% in 2019. Today, more than half of online shoppers start their searches on Amazon, making it a prime place for advertisers to connect with potential customers. 

Ready can thwart that incursion by stressing to merchants the power of Google data and the tools that data may eventually help create. Google will be introducing a “Shopping Graph,” an AI-generated model that “understands products, sellers, brands, reviews…[and] how those attributes relate to one another,” Ready wrote.

The feature is modeled after Google’s “Knowledge Graph”—which appears to users as an infobox when they search for things like a celebrity’s name—but will be hidden from merchants and other users on the front-end, with updates and insights delivered as Google-developed tools meant to help optimize their listings.

“It’s really our modeling and our data set around these things,” Ready said. “And then we bring it back to them through specific product features.”

Read More