Thrasio-style venture 10club has made its first acquisition, My NewBorn, an ecommerce online business in the baby products category.
10club had raised $40 million – one of the largest seed rounds in India – in June.
Bhavna Suresh, cofounder of 10club, told ET that as part of the acquisition, My NewBorn’s founders Rakesh and Abhishek Jain will join 10club as entrepreneurs in residence for a minimum of 24 months.
The founders will be paid a certain sum upfront and their entire team of 13 will join 10club, she added.
They will also receive a percentage of cash flow and profits from the business post-acquisition for a period of five years.
“We are announcing our first acquisition, but we are very soon going to announce others. We are already operating a bunch of them,” she said, declining to disclose details.
Founded last year by former Lamudi CEO Suresh, 22feet co-founder Deepak Nair and Class 5 Global co-founder Joel Ayala, 10club acquires ecommerce merchants who have built sustainable businesses on ecommerce marketplaces such as Amazon and Flipkart and accelerate their growth.
It focuses on sports, home accessories, and the baby and pet category.
My NewBorn is one of the top sellers in the category on Amazon India’s marketplace, the company said.
The 10club team will harness insights from the brand’s consumer shopping behaviour and usage patterns to expand its product portfolio.
Suresh said the company has acquired several other businesses and is in the process of integrating them – which typically takes 60 days – to 10club.
The startup, backed by Fireside Ventures, is on track to acquire 15-20 businesses in the near future.
“Every business that we look at today approximately grows at 60-70% year on year. So, they have found the traction and the product-market-fit. Generally, what’s missing is they have not found a brand proposition, they have not started creating a community, and that stickiness has not started. 10club usually comes in at this intersection,” Suresh said.
“…but when you take a business from Rs 20 to Rs 100 crore, the processes, capital, and the structure that you need to do — this is what we come in with.”
Thrasio-style play is modelled after US-based company Thrasio Holdings Inc, which acquires and scales brands on Amazon’s marketplace.
In India, this model has picked up steam recently.
This year alone, FirstCry founder Supam Maheshwari launched GlobalBees, the former CEO of Myntra, Ananth Narayanan, launched Mensa Brands, and former Flipkart executive Rishi Vasudev launched Goat Brand Labs, in this space.
These startups have been backed by investors including SoftBank, Falcon Edge Capital, Flipkart’s venture arm, and Tiger Global.
Suresh said she will scale the four-year-old brand by as much as 20 times their current annual revenue run rate.
In the last 60 days of its operation as part of 10club, the brand has been launched on five online channels including Flipkart, FirstCry and Meesho’s direct selling platform.
After scaling businesses on online marketplaces and helping brands build strong communities, 10club plans to take these ventures direct to consumers.
Source: Economic Times