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Amazon aggregator Thrasio begins layoffs, names new CEO –

The day of reckoning has arrived Thrasio, one of the biggest startups in buying and strengthening Amazon third party sellers. TechCrunch has learned from sources that the company, which was valued at between $ 5 billion and $ 10 billion last year, is set to lay off part of its workforce this week. The news comes at a time when Thrasio is changing his leadership: today is announced that Greg Greeley, a former Airbnb president and longtime Amazon executive, will join its board and take on the role of general manager in August.

He will replace Carlos Cashman, one of the company’s founders, who will remain on Thrasio’s board of directors.

The appointment of the strike and the appointment of a new manager are the latest in a series of ups and downs in Thrasio over the past six months which underscores some of the challenges in the integrated business model:

– In April 2021, when Thrasio announced a $ 100 million increase, founder Josh Silberstein – then CEO of Cashman – told TechCrunch that Thrasio was keeping an eye on a public list to raise more money for the expansion. , or through a traditional IPO or SPAC; She also appointed a new CFO to oversee the operation.

– The idea of ​​SPAC began to shape the summer, with Thrasio possibly valued at up to $ 10 billion. But then the new CFO went off in July, just three months after it joined; Silberstein left the company in September; and in the beginning OctoberSPAC elections have been postponed, citing problems with financial accounting.

But at the end of that month, Thrasio announced another special fundraiser, a $ 1 billion deal led by Silver Lake, which was when it hit its $ 5-10 price target.

– But that’s not all: the email captures the cycles It is accused of seeking investors from the company through a $ 2.7 billion private car. We have not been able to verify that the email is legitimate or fake.

Unfortunately, retirement is not a fake. TechCrunch has confirmed the company’s rumors, and we have also been shown an internal document explaining how it will be implemented: people will be notified by their managers in the next two days (Tuesday and Wednesday).

The company said in a statement that it had “made the decision to reduce the size of the Thrasio team,” but did not specify how many employees it would be affected by.

I understand that the retirement will be part of a broader reform. In that memo, Cashman and Thrasio president Danny Boockvar wrote that in order for Thrasio to continue its process, the company would need to make some “strategic and operational changes.”

“This is not an easy decision – especially in our culture which is based on community and sharing,” they added.

Released workers will receive “termination, health care, employment support, and accelerated commitment to some of your opportunities,” as well as job transition support and alumni liaison to continue support, the memo said. Their last day of work will be May 13.

Thrasio growth

Thrasio was founded in 2018 by Cashman and Silberstein, to take advantage of an Amazon-like economy: The Amazon Marketplace has millions of businesses and brand names (almost 2 million active sellers) one dose) where there is a business being built to bring together some of them to run efficient production, marketing and analysis, and completion among them.

Businesses will be picked up by Thrasio, who will invest in technology to drive better and more profitable operations such as e-commerce operations, both on Amazon and beyond – as well as a new version of Procter & Gamble in the twenty-first century. .

It has raised nearly $ 3.4 billion in funding to build its business, acquiring hundreds of brands, including investors such as Silver Lake, Advent International, Oaktree, Upper90, Harlan and others. When it raised its $ 1 billion turnover last October, it was buying trades 1.5 times a week and had several hundred brands.

Dozens of other aggregators have followed Thrasio’s lead – about 150 according to Thrasio estimates, and together have raised $ 15 billion in capital to fuel that ambition – keeping an eye on the same opportunity Thrasio was pursuing. Thrasio itself has become Amazon’s top five sellers.

Where Thrasio is headed

It is not clear why the treasury suspended Thrasio’s SPAC last year, but it does address some of the challenges of running a business and accounting as they grow at a faster pace, and its focus on bringing many other businesses together. .

The idea of ​​reinforcing the repetitive methods of many retailers seems like a great idea in theory.

“What happens when you get into that valuable asset is that it can be difficult to grow your business and manage it,” Silberstein told me last year, referring to SEO, marketing and supply chain management as some challenges. “That means when you grow from $ 1 million to $ 10 million, the excess will decrease and it will be more difficult to recover. they simply could not afford to continue what they were doing.We thought, if we get 10-20 of these we will have the weight to build the best breeding supply chain, marketing and so on. would fix the problem. ”

But in fact Thrasio was building a business consisting of several different categories of clients, geography and statistics. Coordinating even for similar businesses can be costly and difficult (and often wrong).

And collectors generally pretend to solve these technological issues, but in some cases, collectors are not building as much technology as you think: they are buying third-party tools to help with SEO, optimization and more.

In this case, the move to Greeley – whose Amazon roles include the deployment of its global app Prime – suggests that the company needs a more experienced and leading manager to maintain its long-term strategy in the right direction, in particular. in terms of Greeley origin and track record of the consumer marketplace.

Cashman was also dealing with another controversy outside of Thrasio. He faces a charged Written by Stacy Chang, an investor who left Fund Founders to join Cashman in a new investment firm called Arrowside Capital. She accused him of firing him after he decided not to move to the company, and she is seeking compensation, including for the job, she said she did six months.

Thrasio also points out that it is too big, too fast for the collective text of the staff. “Now, as we evaluate our strategy for the next step, we need to take the time to properly absorb and grow the businesses we have acquired, ensure we have the firmness and control, and then look to re-evaluate our team as best. growth areas. ”

They went on to say that some of them are “refining” their M&A team to be able to deal with purchases and integrate them into the company’s process, as well as “that we are entering our transformation environment. “There is a catastrophe, a war, a sharp rise. Inflation, a disruption of the supply chain and a change in consumer behavior.”

This is unlikely to be the latest chapter of Thrasio, which still owns hundreds of major e-commerce brands. But the big question will be whether it will continue as one Greek organization, and whether it will continue to grow as it was; Or if she takes a course to “explain” some of the huge investments and purchases she has made in recent years.

“Four years ago, the creative team of Thrasio created a new way for this business community to achieve their business goals and see that they can achieve their products – Thrasio continues to fire,” Greeley said. said in a statement issued today. “It really was amazing – and it still faces a market capitalization with nearly $ 400 billion in total third-party sales by 2021 and additional trillions in the large retail ecosystem.”