Click here to download our Q2 2024 eCommerce Brand Valuation Report

After The Gold Rush | eCommerce Brand Acquiror 2023

After The Gold Rush | eCommerce Brand Acquiror 2023

Blog Summary

In this insightful blog post, we delve into the world of eCommerce aggregators, examining their rise, peak expectations, and subsequent decline. Against the backdrop of post-pandemic challenges and market fluctuations, we explore the crucial learnings that pave the way for a mature and stabilized industry. From strategic shifts to the viability of the aggregator model in 2023, we present perspectives from industry experts and highlight the potential opportunities that lie ahead. Join us as we navigate the ever-evolving landscape of eCommerce aggregation and its promising future.

Recent Blogs

Key Takeaways From The eCommerce Acquiror Conference – NY 2024


Our 2024 eCommerce Acquiror Conference took place Jan 16th in New York, hosting eCommerce acquirors and eCommerce operational experts from around the world. The agenda was to discuss key trends driving eCommerce valuations and discuss operational areas within eCommerce acquirors. We thank our title sponsor Airwallex and all our other sponsors for making this great event a success and we look forward to seeing you all and some new faces at our next annual eCommerce Acquiror Conference.

1.eCommerce Environment

Participants: Furhaan Khan at UBS, Bill Pecoriello, CEO at Consumer Edge.

Key Takeaways:

  • UBS and Consumer Edge kicked off discussions reviewing the macro landscape impacting eCommerce valuations.
  • Based on public company comparables, eCommerce valuations have softened. Consumers spend is forecasted to transition from post covid high sectors such as travel however consumer spend in general remains subdued by caution towards inflation and interest rates.
  • Medium view (2025-2027) is that M&A volumes will be expected to increase once again as inflation starts to curb and the cost of capital stabilizes.



Session 1 Panellists:

    • Philipp Triebel, CEO at SellerX.
    • Mark Goldfinger, VP of Growth at unybrands.
    • Ben Cogan, Co-Founder at Agora.
  • Insight provided separately by Tushar Ahluwalia, CEO of Razor, who have a successful record in consolidation of aggregators [Stryze & Valoreo].


Session 2 Panellists:

  • WTB Co-CEOs, Jaschar Hupperth and Nicolai von Enzberg.
  • Olsam Group Co-Founders: Ollie and Sam Horbye.

Key Takeaways:

  • Announcing 2 New Mergers Of Aggregators: The Fortia Group was proud to announce the merger of We The Brands and Mantaro Brands, two German based aggregators, a deal that The Fortia Group had been appointed M&A advisors.Weeks before the conference the eCommerce world learned about the successful merger between Olsam Group [UK based] and Dwarfs [NL based].It was noted that while these are logical strategic moves and something many in the aggregation space will be considering, these deals do take longer due to the complex nature of appeasing a larger group of shareholders. Deal timelines were from 6 to 12 months in duration.


  • Consolidation (MoA) and Acquisition Trends: Acquirors in the space are communicating more discussing topics and solutions to issued being created. Consolidation within the market is an important topic.The macro implications of cost of capital in the current environment consolidation are a lot more complex than straight M&A due to the fact they are share deals with limited cash changing hands.The main reason for consolidations are as follows:
    • Strengthening Balance Sheet
    • Scale
    • Cash
    • Leverage
    • Group EBITDA


  • Challenges of Market Conditions: Panellists discuss the challenges faced over the past year, including lower consumer spending due to inflation, pressure on margins, the rise in interest rates, and the general move towards a survival mode among companies.
  • Direct-to-Consumer (DTC) Focus: The preference for DTC over Amazon (FBA) due to control over customer data, customer support, marketing, and the overall customer experience (CX) is emphasized.Amazon remains a focus, but many are becoming more interested in diversifying into DTC or gain back more control through this channel, particularly as increasing Amazon operational fees are forecasted for 2024.


  • Integration of AI and Technology: eCommerce players have a range of tools available to help them achieve success in the markets.AI is delivering solutions for cost savings removing resource requirement on content, customer service benefits by reducing SLA’s pricing and demand planning.



Participants: Alex Lukashov, CEO at Fintent, Muddy Mat, Johannes Rossner [on behalf of Alpin Loacker and BBG), Daniel Mc Carthy, Co-Founder at Theta, Paul Hanley, Co-Founder at The Fortia Group and Withum CPAs.


  • Our Shark Tank Brands Were A Big Success:
    • Introducing Muddy Mat – Impressive omnichannel pet brand coming to market in Q1 2024. Matthew, Andrew and Ikho gave a fantastic demo and financial performance overview of the brand.
    • Alpin Loacker – EU based tech hiking clothing and equipment omnichannel brand.
    • Berlin Brands Group – US portfolio. BBG wish to refocus efforts and as such are open to offers for their current US portfolio.

To learn more about any of the above deals, please contact The Fortia Group directly.

  • Daniel Mc Carthy, Co-Founder at Theta educated the crowd on valuations with this talk on “Uncovering Hidden Valuation Insight through Predictive Customer Value Analysis”, followed by a poll on current valuations observed in the market.

Poll no.1: What is the typical valuation range you are seeing for profitable Amazon FBA led brands?

  • Average valuation range: The average lower bound of the valuation range is approximately 2.86x, and the average upper bound is approximately 4.13x.
  • Lowest valuation range: The lowest valuation range given was 1x.
  • Highest valuation range: The highest valuation range provided was 8x
  • Please note all valuation ranges are EBITDA multiples.

Poll no.2: What is the typical valuation range you are seeing for DTC led brands?

  • Average valuation range: The average lower bound of the valuation range is approximately 3.78x, and the average upper bound is approximately 6.06x.
  • Lowest valuation range: The lowest valuation range given was 2x.
  • Highest valuation range: The highest valuation range provided was 12x.
  • Please note all valuation ranges are EBITDA multiples.


  • Paul Hanley, Co-Founder at The Fortia Group brought the audience through the firms new Buy-side diligence offering. The Fortia Group have been servicing investors and credit funds but are now formalizing their Buy-side diligence offering, a rapid initial target screen, to learn more please contact The Fortia Group directly.



04.Value Creation


Will Holtz, Head of Operations at SourceMedium

Daniel Mc Carthy, Co-Founder at Theta

Robert Sperling, CEO at EastWest Basics

Rupesh Sanghavi, Founder & CEO at Ergode

Jim Stine, VP of sales at ShipPlug

Naseem Saloojee, Co-Founder at Carbon6

Kevin Fischer, President At KAPOQ

Bill Tauscher, CEO at Farallon Brands

Balaji Kolli Co-Founder at Saras Analytics

CFO Josh Holley at Bare Performance Nutrition

Jacob Cook, CEO at Tadpull

Heath Barnett, Head of SMB & Growth, North America at Airwallex

Jim Mann, VP of Europe at Getida

Ben Fletcher, CEO at The Mothership

Joseph Falcao, CFO at Orva

Shawn Dougherty, COO at Society Brands

Alex Urdea, Founder at Deep Ocean Partners


Key Takeaways:

  • Title sponsor Airwallex spoke about the important of localised payment options and how this was going to be crucial as part of a hyper-localised targeting strategy for eCommerce today and into the future.
  • Local payment methods accounted for 77% of transactions worldwide.
  • 44% of consumers are likely to trust online shop that offers their preferred payment methods.
  • The supply chain panel agreed that the rise of manufacturers going direct to the customer via marketplaces will continue to cause difficulties for eCommerce acquirors. It will be difficult to compete on price, however, as always obsessing over CX, branding and marketing strategy always have their place in combatting this type of competition.
  • A common theme throughout value creation talks were the importance of visiting and developing relationship with suppliers globally. Often this can open up different credit terms or cost efficiencies over time.
  • Predications for 2024 on supply chain were mixed as we move further from a covid container spike yet current situations in Suez Canal may continue to cause delays and additional cost.
  • KAPOQ and Carbon 6 explained that obsessing over performance metrics and investment benchmarking were crucial for brands and operators to double down on, with new Amazon marketplace fees forecasted to hit 2024, operators should be focusing on where they can make savings and efficiencies within the P&L.
  • CFO Josh Holley brought this to life with insight into how his brand, Bare Performance Nutrition are optimizing with data support and help from Saras Analytics.
  • Scrutinizing costs and ensuring you are setup for future success was a common theme, Bill Tauscher at Farallon Brands explained the importance of agility in retail, the role of eCommerce and marketplaces, and a view on timing when discussing growth plans with big retail.
  • Conference Partners Jake Cook, CEO at Tadpull and Daniel Mc Carthy, Co-Founder at Theta discussed the importance of understanding and using data sets to help with prediction analysis or growth forecasting.


Poll no.3: What is your top financial and operational priorities for 2024?

  • Become cashflow positive: 45%
  • Increase corporate EBITDA margins: 23%
  • Revenue growth: 13%
  • Reduce leverage: 12%
  • Improve inventory turns: 7%

Poll no.4: What is your target for corporate EBITDA by end of 2024?

  • Unprofitable: 0%
  • 1-5% margins : 20%
  • 6-10% margins: 10%
  • 11-15% margins: 60%
  • 16-20% margins: 10%

Poll no.5: What will drive the biggest valuation (profit multiple on exit / listing) of aggregators?

  • Financial profile e.g. corporate EBITDA margin: 15%
  • Brands: revenue quantum, growth, net margins: 54%
  • Being truly omnichannel: 8%
  • Tech & Data competence: 0%
  • Scale efficiencies: 8%
  • Other: 1%


Need some comments from the finance and operations panel.

Need a comment from an investor in the space [ don’t name Alex Udea].

Need success stories comment, don’t need too much detail on that.


We thank all our sponsors, without them conferences like this would not be possible. We look forward to working closely with you all throughout 2024.

  • Airwallex | ConferenceTitle Sponsor
  • BigCommerce
  • Carbon6
  • Eastwest Basics
  • Factored Quality
  • Getida
  • Grips
  • Saras Analytics
  • ShipPlug
  • Withum

As we mentioned at the event, this will become an annual event, and together, we look forward to making the next one bigger and better.


Blog Summary

In this insightful blog post, we delve into the world of eCommerce aggregators, examining their rise, peak expectations, and subsequent decline. Against the backdrop of post-pandemic challenges and market fluctuations, we explore the crucial learnings that pave the way for a mature and stabilized industry. From strategic shifts to the viability of the aggregator model in 2023, we present perspectives from industry experts and highlight the potential opportunities that lie ahead. Join us as we navigate the ever-evolving landscape of eCommerce aggregation and its promising future.

Read Time: 5 minutes

In November 2022, we published an article discussing acquiror financing in the context of the eCommerce market that had just experienced the worst quarter of M&A since the crash of 2008.


In light of Q4 2022 forecasts from the US Federal Reserve and leading investment banks, we outlined potential financing options going into 2023 and the strong possibility of industry consolidation or Mergers of Aggregators [MoA].


The market buoyed at the start of 2023, with eCommerce and emerging technologies outpacing legacy retail. However, for an industry fuelled by debt it looked likely that the tough decisions were going to have to be made in Q2 2023 when rates peaked, before a recession/soft-landing [forecasted H2 2023].


Beginning of the End of the Gold Rush

Covid supercharged eCommerce growth in 2019. The investment opportunity quickly snowballed into – what the media dubbed – a modern-day “gold rush” of acquiring brands, with aggregators raising >$16bn in debt to achieve forecasted returns.


Naturally, the distressed sale of Factory14 made headlines [Q1 2022] as it was considered the first falter in a much hyped industry where first movers, Thrasio reached unicorn status quicker than any other company in recent history.


Many eCommerce aggregators responded to the news of Factory14 by shifting focus away from M&A to operations. But, Factory14 wasn’t simply a product of mismanagement nor a lack of economic precedent; there was a wider context that included post-covid landing, war in Ukraine, rising inflation and rate hikes.


Media focus skews toward the negative, but suggesting the aggregation business model as short-sighted or that consolidation is a sign of market implosion is devoid of historical learnings.


P&G have employed the business aggregation model since the 1800s; and waves of consolidation in the US have followed growing markets since the 1890s (see the rise of the conglomerate in the US in the mid 1960s).


In our recent aggregator event in Amsterdam, 57% of aggregators said they were in active negotiations to acquire or be acquired. In a market that effectively launched 150+ well-funded start-ups 3 years ago, consolidation should be expected and signals the beginning of stabilization – after the goldrush.


eCommerce Brand Aggregation | Rise > Peak > Decline > Learnings

Most growth models follow a similar trajectory of “Rise > Peak > Decline > Mature.” Whether you view the current eCommerce brand aggregation sector from a technological or process-driven standpoint or simply from a product’s lifecycle, the “decline” or disappointment phase is inevitable. It’s important to note that the application of learnings from the “decline” phase often determines the key players in the next phase, when the industry stabilizes and begins to mature.


Let’s look at the “Rise > Peak > Decline” phases with regards to learnings going forward. Then, we will ask a legacy firm and a new firm why the model is viable and attractive in 2023.


Phase #1 Rise of the eCommerce Aggregator

Phase one represents the initial breakthrough or –in this case– the launch of the eCommerce aggregator model. Excitement and media attention surround this phase, but the practical application and limitations of the model are not fully understood.


2020/2021 saw multiple hundred million dollar raises to support brand acquisitions and to take advantage of this new opportunity.


Phase #2 Peak Expectations

With great media attention and enthusiasm there is a tendency to inflate expectations and project unrealistic outcomes. In 2021, multiple firms acquired tens of brands at (what we would later learn was) peak valuations, hired aggressively, and began talks of potential IPOs.


Average valuation multiples peaked in the summer of 2021 at 4X-6X SDE for FBA led brands and 6X-10X EBITDA for DTC led brands. And, while the industry understood these valuations to be inflated the hope was our newfound adoption of eCommerce on a global scale –because of COVID– would sustain post-COVID.


Evidence of this “enthusiasm” was seen in our Acquiror Survey Q4 2021 where the majority of acquirors projected to acquire >20 businesses in 2022, with 39% of firms projecting >40 businesses.


Reportedly, a single firm acquired >70 eCommerce brands in 2021; this is unprecedented In the history of M&A.


Phase #3 Decline or Disappointment or Disillusionment

This phase is marked by a decline in enthusiasm as the return on investment does not meet projections, and deficiencies in operations become evident.


Post-COVID hard landing saw a softness enter the market that impacted the contribution margin of assets by as much as 50% [YoY].  According to a leading aggregator, the decrease in profitability rendered assets acquired at a 6X multiple in 2021 as if they had been purchased at a 9X–12X valuation – a significantly higher burden of debt.


Our end-of-year Survey of Acquirors [2022] revealed:

  • Deal volumes are down: 90% of firms did less than 10 deals in 2022.
  • Valuations are down: 4 out of 5 firms are reporting a >30% decline in valuations, and 37% expect to see further decline in valuations in 2023.


Current valuations [per our eCommerce Valuation Report published Q2 2023]:

  • FBA led brands: 2X–4.5X SDE
  • DTC led brands: 2X–10X EBITDA


This “Decline” phase is crucial as it separates firms that will pivot, survive and mature from those that will fold. The distressed acquisition of Factory14 signalled the advent of this phase.


Learnings >> Mature Market

Gartner’s Hype Cycle dedicates an entire stage to post-decline learnings called “The Slope of Enlightenment.” This stage is marked by a growing understanding of practical applications, benefits, and potential risks for the model in a particular sector.


In many ways, eCommerce M&A finds itself between phases three [decline] and four [mature] with post-pandemic learnings as the conduit.


Here are some recent learnings from our aggregator event in Amsterdam [Q2 2023]:

  • Broad vs. Niche strategies: While 64% of acquirors said they would focus on fewer categories in 2023, our recent poll revealed that 50% of acquirors favoured a blended strategy.
  • De Risking through channel and supply chain diversification.
  • Restructuring deals to retain the founder. To sustain growth many acquirors are prioritizing new product development. One strategy to achieve this is in-keeping with the PE model of retaining the founder as opposed to migrating the asset in its entirety to in-house operations, as was standard in 2021.


There is an opportunity for fast followers [new acquirors] that can raise capital, apply the learnings from first movers, and take advantage of these market conditions without the same burden of debt.


Why the eCommerce Brand Aggregator Model is Still Viable in 2023

View from Joseph Falcao, Former CFO at Thrasio.

The eCommerce aggregator model is premised on acquiring assets at single digit EBITDA and creating synergies to justify the value creation. It is basically decentralizing the P&G R&D model to drive global e-commerce Seller Community.


Companies during the pandemic were forced to supersize their organizations and embed strong multiples to acquire eCommerce assets. During the “gold rush,” it may be fair to accept that in-depth cross-functional diligence was not performed well, which was then compounded with supply chain (inventory) issues [H2 2021].


As the market faced the post-covid headwinds, most aggregators intentionally digested the “painful” medicine to reassess (a) growth drivers; (b) supply chain channels; (c) size of the organization; (d) enabling functions like Tech and Finance/accounting; and ( e) divested non-core assets.


Most important, they refined their M&A model and deal with onboarding strategy and synergies. Furthermore, they socialized across the enterprise on how to deal or avoid complexity. They were smart to leverage the economic downturn to strengthen their organizational capability to prepare for the eCommerce Aggregator 2.0.


Despite the media, we are optimistic as to the path forward, which will be fought on three fronts:

  1. Acquiring new eCommerce assets.
  2. Getting into new commerce channels (like Shopify, DTC).
  3. Regaining time by acquiring other “smaller aggregators.”


The 2.0 phase will reset the valuation benchmarks. The top Acquirors want to “win the race” for an IPO. There is an opportunity for more than one going public in this space (like Uber and Lyft).


View From New Aggregator: Go North

Why is the model attractive?

  • Less competition: Fewer current buyers, leading to more favourable multiples
  • Healthy market & margins: There are over 2,000,000 active sellers on Amazon and over 100,000 have a profit margin >20% and a revenue above $1m USD
  • Seamless Brand integration: no need to think about P&C integrations (usually a huge risk and time consuming)/no tax investigations/easy to set up to net suite (ERP systems) etc.,.


What have you learned from first movers?

  • Hire experienced operators early – both front and backend.
  • Focus on the important few growth levers, to prevent internal distraction, and maximise impact.
  • Invest in technology and implement ERP system
  • Benchmark against legacy aggregators like P&G and Unilever, not first movers in the sector.
  • Don’t separate the M&A department from the rest of the organisation.
  • Buy Quality over quantity.
  • Be fair to entrepreneurs.


Partner with The Fortia Group

If you are considering selling your eCommerce business in 2023 or 2024, now is a good time to start preparing your business to exit.


Three ways The Fortia Group differs from other firms and secures the best deal:

  1. We are the only investment bank focused exclusively on the eCommerce sector.
  2. We offer an Exit Ready programme to prepare your business to go to market, even 1 –3 year out.
  3. When your business is ready we run a competitive auction with all the relevant buyers including PE firms, family offices and strategics to achieve the best valuation.


Contact us today for an introductory call.


Article Contributors:

Accel Club, Go North, Joseph Falcao.

Recent Blogs

Contact Us

Scroll to Top