Amazon 'Aggregators' Who Raised $16 Billion Are Now Teetering

During the pandemic, Wall Street banks and private equity firms invested billions of dollars in startups rolling up popular brands sold on Amazon.com. The bet was that these upstarts, fueled by an online sales boom, would become the next consumer product conglomerates -- like Procter & Gamble or Unilever. Then the pandemic ended, consumers returned to the stores, and Amazon's sales growth cratered -- erasing almost half of its market value. Now the reckoning has arrived for these so-called brand aggregators. From a report: With names like Thrasio, Razor Group and Perch, the companies aren't widely known but over the past few years have shelled out tens of millions of dollars for tea kettles, foot massagers, peppermint-based jock-itch remedies, medicine balls, magnetic eyeglass holders, air purifiers and more. To finance the buying spree, they raised $16 billion -- mostly debt -- from big names like JPMorgan Chase, Goldman Sachs Group, BlackRock and Bain Capital, as well as smaller investment funds. Rising interest rates, higher costs and cooling online demand have pushed some of these upstarts to the edge, forcing them to seek debt relief or merge with one another, according to people familiar with the situation. There are so many aggregators and investors speaking with one another it's difficult to predict which companies will emerge intact and which will get washed out. The consolidation could ding some lenders, which might be forced to write down their investments, a hit that could collectively reach billions of dollars. BlackRock said in February that it wrote down the value of Razor Group, contributing to the investment firm's fourth-quarter decline in assets. The alternative to writedowns could be even more painful: businesses that go broke trying to go it alone and cana(TM)t pay back anything at all.

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