Amazon marketplace brands are seen as a big opportunity for growth by Heyday and other startups that ... [+]
Heyday, a startup that seeks to buy, incubate, and grow Amazon
That brings Heyday’s total funding thus far to $245 million, impressive for a company that only launched in August and emerged from stealth in November.
The Heyday news is the latest indicator of the strong enthusiasm tech investors have for Amazon aggregators - companies that believe they can profit by taking successful, but small, Amazon sellers and making them a lot bigger.
Crunchbase.com reported in March that nine Amazon-focused marketplace aggregators have raised over $2.3 billion in funding, with most of that announced in the past eight months.
Thrasio, the biggest, and one of the oldest, companies in the space, has raised $850 million this year, bringing its total to $1.7 billion. In March it announced it had acquired its 100th Amazon seller.
Heyday differs from the competition, according to co-founder and CEO Sebastian Rymarz, in that it is interested in partnering with sellers to accelerate their growth, rather than simply acquiring as many brands as possible.
“For us, this is not an arms race of product aggregation,” Rymarz said. “For us, this is about brand acceleration.”
Heyday doesn’t disclose which brands it has acquired, or how many it currently owns, but its revenues have accelerated rapidly, exceeding $100 million before the San Franciso-based company was a year old. It is on track to surpass $200 million by the end of this year, Rymarz said.
Heyday’s latest funding round was led by General Catalyst, which tripled its original investment from the Series A round, The new round included financing from existing investors Khosla Ventures and Arbor Ventures, and Heyday’s entrepreneur partners.
While Heyday, like the competition, is buying brands, its broader goal is to create a platform that brands can use to become more effective marketplace sellers.
“If Heyday one day is a $50 billion company it’s not going to be because we acquired a bunch of brands,’ Rymarz said. “It’s because we have this platform, and the platform makes it so that a digital brand is worth more inside of Heyday than outside of Heyday.”
In addition to acquiring brands, Heyday is creating a partnership model for entrepreneurs where they can grow the business inside of Heyday, and get equity in Heyday. “Our entrepreneur partners today are collectively our third largest shareholder. And we want to make them our largest shareholder,” Rymarz said.
“Our hope is the most ambitious entrepreneurs with the biggest visions, who are building the most exciting brands, are going to want to partner with us, because we’re building our organization around partnering with them,” he said.
Heyday, Rymarz said, gives brands an edge by architecting supply chains to be agile and work with Fulfillment by Amazon, and by investing in data capabilities.
“We know at any given point in time for any of our brands what the competitive landscape is, what customers are saying about competitors’ products every minute of the day, and what’s trending up and down,” he said. That data helps brands improve their rankings on Amazon and make sure they get the best placement on the “digital shelf” of the marketplace.
"A digital brand is worth more inside of Heyday than outside of Heyday," said CEO Sebastian Rymarz.
Heyday has assembled a leadership team with backgrounds in marketplaces and e-commerce, including Head of Technology Tapan Shah, formerly at Amazon and South Korean online marketplace Coupang; Head of Operations Karan Gandhi, of Boxed and Amazon; Head of Creative Ted Tsandes of Skullcandy. Megan Agnew of Conagra and Latham & Watkins is head of legal.
Heyday has appointed Tina Sharkey, co-founder of Brandless, to its board of directors, along with General Catalyst partner Mark Crane.
Heyday “stands out in a competitive, fast-growing space with its bold, brand-first approach and its focus on technology and data as differentiators to building an enduring company,” Crane said in a statement.
