This Mumbai-based Thrasio-like startup gives online sellers an exit post brand acquisition
When Utsav Agarwal heard about US-based Thrasio's business model in 2019, he decided to venture into this space.Thrasio - valued at $4 billion in just three years - acquires sellers on Amazon and other Direct-to-Consumer (D2C) startups and scales them.
In 2020, Utsav, a former employee at Uber and a Silicon Valley-based VC, started working on this idea. He spoke to 100-150 sellers to understand their pain points."After a point, these guys need someone to help them scale their brand because most of these founders are very good at a particular aspect of business, like marketing or product, but after that, they don't know how to build the brand further," Utsav Agarwal, co-founder and CEO, Evenflow, tells YourStory.
Pulkit Chhabra, who was earlier handling expansion at WeWork, onboarded as the second co-founder. He is also the Vice President - Acquisitions at EvenFlow.
The Mumbai-based startup - founded in March 2021 - acquires online sellers in pet and baby care, athletic wear, and kitchen utilities, among other product categories. It avoids categories such as fashion, apparel, and electronics as they need brand recognition to sell.
"We are majorly focused on online sellers instead of direct-to-consumer (D2C) startups. A D2C player is trying to build a brand and wants people to come to its website and experience its products and shop, while a digital seller is looking to increase its top-line and bottom-line," explains Utsav.
This Thrasio-like startup enables profitable third-party ecommerce sellers to scale by acquiring them
Evenflow goes after brands making $100,000 - $1 million in revenue. It prefers to acquire a 100 percent stake in an online seller's company and does not do deals below 51 percent. "To be completely involved, you need the full stake," he says.
After the acquisition, the startup onboards the founders to stay with the EvenFlow team for three to six months to help with the transition, post which they can exit."There are many types of online sellers. An old man will be selling from Surat, a lady will be selling from Coimbatore, and another businessman working from Jalandhar. If our thought processes match, we keep the founders on board in a consultant capacity. However, if not, we let them go," Utsav explains.
At present, EvenFlow has acquired two online sellers, including BabyPro, a Mumbai-based baby proofing company. Moreover, it is in advanced talks with four other sellers. So far, none of the deals is closed.
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Funding and future plans
In December 2020, at least 70,000 sellers were selling through Amazon's global platform. Many digital sellers are also selling on other ecommerce platforms, including Flipkart, eBay, and Etsy, and through Facebook, Instagram, and WhatsApp.
In the next 18-24 months, EvenFlow aims to acquire 30 to 40 online businesses, where it would have 70-80 percent of founders in the three to six months transition period, 10 percent in a consultation capacity, and the remaining 10 percent as influencers.In 2021, EvenFlow raised a seed round of $1 million from the 9Unicorn Accelerator fund, Equanimity Ventures, and angel investors, including Cred CEO Kunal Shah and Unacademy Co-founder Gaurav Munjal.
US-based startup Thrasio's business model has found many takers in India. Ananth Narayanan, former CEO, Myntra, with Snapdeal's Kunal Bahl and First Cry's Supam Maheshwari, are leading the charge in this segment.
While Ananth founded Mensa Brands, Supam's GlobalBees raised a big Series A funding of $150 million.
Leading investors, including Chiratae Ventures, Lightspeed India Partners, and Fireside Ventures, remain extremely bullish about Thrasio-like startups.
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Edited by Suman SinghPrasannata Patwa