And the undisputed king of these is none other than Amazon, an e-commerce behemoth with an estimated GMV of $490 billion in 2020 and close to 2 million private label sellers.
A quick Google search on “how to become an Amazon seller” returns countless resources and success stories on how easy it is to become a profitable seller. The sheer scale of Amazon means that individuals can leverage Amazon’s tremendous reach and formidable logistics network to see significant revenues in a short amount of time. This has led to the rise of savvy solopreneurs who have been able to build significant Amazon empires from their living room. But what happens when the business grows so big that it requires more capital and operational expertise than an individual can handle?
This is where Rainforest comes in. Rainforest is a brand aggregator that acquires high-performing marketplace sellers including Amazon sellers for operational synergies. They focus on sellers based in Asia-Pacific with evergreen product categories such as home and living, pets and personal care. For solopreneurs who have hit a growth ceiling, or are simply tired of the grind, Rainforest offers a way for them to sell their business and move on to their next project. The most compelling part of the proposition to sellers? Rainforest can typically provide a valuation within several days and wrap up due diligence within a month, which means cash in the bank from the first payment tranche within 40 days.
Since launching earlier this year, Rainforest has not only completed several brand acquisitions, but has also managed to drive organic growth across its portfolio while building up a US$50 million M&A warchest. Rainforest has a clear acquisition strategy and robust due diligence process in place to build a digital-native brand portfolio that is able to deliver long-term sustainable returns. Under Rainforest’s professional management post-acquisition, the brands can be taken to the next level, through value-add measures such as improved inventory management, cost optimizations, and expansions to new marketplaces and channels. They have also built a strong proprietary technology stack to automate operations at scale.
While the e-commerce aggregator play may appear to simply represent a new wave of roll-ups, rolling up digital native brands across multiple product categories and geographies has its own unique set of challenges, and is hard to pull off. In order to be able to achieve cost synergies and economies of scale, there not only has to be clear value creation opportunities underlying every single acquisition at the brand level, but also a cohesive strategy at the portfolio level. Rainforest is able to make highly data-driven acquisition decisions by leveraging its proprietary analytics software, which enables them to quickly evaluate prospective targets and discover hidden gems.
Our partners have known Co-founder and CEO JJ Chai for many years. He has impressed us since day one as a highly strategic and thoughtful founder and seasoned operator, with a clear bias towards action and strong execution skills, having spent years scaling both Carousell and Airbnb across Southeast Asia. Together with his co-founders Jason Tan and Per-Ola Röst, the experienced co-founders have a deep track record of scaling high-growth startups and complementary skill sets that form a formidable team. This type of business requires astute strategic sense, strict financial discipline, and above all, strong execution skills - all of which the Rainforest team has in spades.
The future is bright for Rainforest. In the words of JJ: “Our goal is to help brands grow beyond a seedling to become part of our lush rainforest”. We couldn’t be more excited to be partnering with JJ, Jason, Per-Ola and the Rainforest team to help merchants supercharge their brands and be the leading buy-and build ecommerce brand player in Asia.