London-based Gravitiq is the latest e-commerce roll-up company, or aggregator, that has attracted a large amount of initial funding. It is buying and scaling Amazon marketplace brands in the digitally-native, consumer e-commerce healthcare sector.
The company announced today $55 million of seed investment in a mix of equity and debt (the company declined to disclose the breakdown), from a group of investors that includes CoVenture and Crossbeam Venture Partners.
What you’ll find a bit different about Gravitiq than its e-commerce aggregator peers is that the company was co-founded by a group that includes doctors and a lawyer, all who know what it takes to build a healthcare brand because they did it with their own brand in 2016.
Doctors Saurabh Srivastava and Adam Gunasekara, and Srivastava’s brother, Sachin, who began his career at Latham & Watkins and has an M&A background, made their first acquisition in October 2020.
“While stuck in a hotel for 14 days during the pandemic, we had the idea of building an online healthcare portfolio that would combine Adam’s and my skills building healthcare companies with Sachin’s M&A background,” CEO Saurabh Srivastava told TechCrunch.
Gunasekara noted that by acquiring brands in one niche, it would be easier to scale due to similarities with customers, while Sachin Srivastava added that having the group’s expertise resonated with sellers who felt comfortable handing their company over to medical specialists.
Gravitiq is looking for companies in all areas of healthcare, like supplements, wellness, baby and first aid. The company has now made half a dozen acquisitions that include orthotics and ADHD and anxiety tools.
The new investment provides a path for the company to acquire additional companies, consider expanding its portfolio of e-commerce healthcare brands and add to its team of 20 employees in the U.S., Europe and Asia.
The company plans to move quickly, but cautiously in the number of companies it buys, and is looking for annual recurring revenue of $1 million to $10 million per brand.
With the new funding, Gravitiq joins a long list of startups that have also attracted venture-backed funding to purchase Amazon marketplace companies. Just this week, San Francisco-based Heyday brought in $555 million in a Series C round. The big name in aggregators, Thrasio, announced $1 billion in October, while Perch grabbed a large investment of $775 million in May.
Sakib Jamal, investor at Crossbeam, says it’s still too early to say how the e-commerce aggregator market will shake out, but that there are a lot of brands that need help. As more and more new sellers join Amazon, there will be a large pool of companies that will seek help from aggregators like Gravitiq, he added.
What stood out to him with Gravitiq was the specialization in healthcare and being able to help companies with their regulatory pathways and making sure they don’t make outlandish claims on packaging, something Amazon won’t necessarily assist with, Jamal said.
“We like that they have both the medical and Amazon operating experience, and that combination is rare,” he added. “Other things that stood out was that they had already successfully run a brand and the materials and the processes they created on how they would do this — even before acquiring their first companies. There was also a trust factor, we trusted them and knew sellers would too.”
via https://www.aiupnow.com
Christine Hall, Khareem Sudlow
