Branded and Heyday, two leading Amazon aggregators, plan to merge into a new entity named Essor, with an expected annual revenue of $400M. The merger reflects the contraction in the industry that once thrived on $16B in investments.
Amazon aggregators Branded and Heyday are planning to merge, forming a new company called "Essor." The news was confirmed by CNBC, and the merger is expected to be finalized this week. The new entity is projected to generate annual revenue of $400M, according to Heyday CEO Sebastian Rymarz. This merger is a significant step in a sector that once thrived but is now facing challenges due to drying up of venture capital and profitability issues.
Apollo Global Management and BlackRock are in discussions to provide new debt financing to support Essor in making further acquisitions. These financial giants are stepping in as the aggregator market faces consolidation, with many companies struggling to maintain profitability. Rymarz highlighted that the merger has been in the works for over a year, and Branded is seen as the ideal partner to help Heyday achieve its goals and stabilize its financial position.
The merger is a response to the tough conditions in the Amazon aggregator market, which has seen a significant downturn since 2022. Heyday is expected to implement a major round of layoffs, potentially cutting up to 70% of its workforce. Branded will absorb Heyday's technology team and select brands like ZitSticka and Boka. The contraction in the market follows the decline in e-commerce demand post-pandemic and the challenges of operating acquired brands profitably.
The Amazon aggregator market boomed during the COVID-19 pandemic, with companies raising over $16B from prominent investors. However, the market has since cooled, with major players like Thrasio filing for bankruptcy. Heyday had previously explored other merger options, including a potential deal with Dragonfly, but those talks fell through. The consolidation trend is expected to continue as the market corrects and companies like Essor attempt to navigate these challenging times.
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