Elevate Brands Has Raised $372M This Year to Buy and Operate Amazon Businesses
Elevate Brands, which acquires and operates Amazon third-party businesses, has raised a total of $372 million this year.
Its most recent funding round, announced Monday, brought in $55 million in equity funding — a follow-up to the Series B round that raised $250 million in debt and equity funding in July 2021.
The round was led by Soroban Capital, with support from Upper90 and funds managed by Oaktree.
Elevate Brands CEO Ryan Gnesin started reselling other brands’ products on Amazon in 2016. With a background in commodities trading, Gnesin was always interested in buying other Amazon brands.
At that time, though, Amazon made it difficult to buy another brand and transfer it to his account. Once Amazon changed its policies in 2018, Amazon aggregators, those who “roll up” third-party Amazon sellers, started to take off.
Gnesin bought his first Amazon third-party company in 2019 for $240,000. He launched his own brand in early 2020 and acquired four other brands that year. These days, the company is paying more than $20 million for businesses.
“We started small, and then we progressively started buying bigger and bigger businesses,” Gnesin said. “It would not be surprising if we started buying $50 million or $100 million businesses in the next 18 months.”
The business really took off this year, jumping from five brands to its current roster of 25 brands. Gnesin expects to have “close to 40” brands by the end of the year.
Elevate Brands’ workforce has grown accordingly to operate these new companies. Elevate Brands employed 15 to 20 employees at the beginning of this year, and now it employs 152 people. Gnesin expects to have nearly 200 employees by the end of the year.
“We feel like we’re only starting to pick up momentum now,” he told Built In. “The business is really accelerating at the moment.”
Unlike some other Amazon aggregators, Elevate Brands prides itself on operating the businesses it acquires. Now that Elevate is starting to acquire bigger businesses that have their own employees, Elevate has retained existing employees to operate those brands.
“We see ourselves more as an operator than we do a [mergers and acquisitions firm],” Gnesin said. “We have 10 people on the [mergers and acquisitions] side of the business, but the vast majority of us are operators, and that’s how we view ourselves.”
Each brand is helmed by a brand manager who works with marketing and logistics teams to optimize products and brands.
Once Elevate Brands purchases a company, the team runs the brand through a 500-point playbook, including optimizing the supply chain, improving its advertising on and off Amazon and bringing the business onto new websites, such as Target, Chewy or Amazon’s international marketplaces. Elevate Brands also adds new colors and sizes of popular products.
Previously headquartered in New York City, Elevate Brands announced in March that it had established a second headquarters in Austin.
This week, the team of nearly 20 Austin employees will move out of their co-working space at Galvanize and into their own 5,000-square-foot office in downtown Austin.
Elevate Brands’ new office has room for about 30 employees, so Gnesin expects the team will outgrow the space by the end of its five-month lease. At that time, the company will either rent an additional space or buy a permanent office, depending on the size of the team at that time.
“We want to double down on Austin,” Gnesin said. “We think this is a fantastic city. We love the caliber of people here, and we like the style. We certainly want to hire more people out of [the University of Texas], and we think this is just an awesome place to to grow the head office of the company.”