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Linn Academy 2021 On-Demand: Grow to sell - what you need to consider.

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The huge surge in new ecommerce brands and sellers in recent years has created a need for an exit route – a role that aggregators like Factory 14 are now meeting. In this interview with Payoneer the company explains more.

Discover:

  • What an aggregator is
  • The key criteria for purchase  
  • Why now?
  • How it works
  • The role of the owner post-purchase

The growth of the aggregator.

Despite the turmoil of the pandemic and other recent market challenges James Allum, Vice President Europe at Payoneer, said looking ahead the future is “looking pretty optimistic”.

“There’s a surge of investment caused by the number of marketplace brands being acquired,” he said, citing the $9 billion raised by aggregators to date. “More successful ecommerce business owners are now faced with successful exit opportunities and the impact this has on the wider industry is interesting,” he said.

Allum discussed the opportunities with Carlos Abascal, CFO of Factory 14, a platform dedicated to acquiring, financing and scaling digital consumer brands. “It’s been an exciting time for this business model and the spike is very recent,” said Abascal. “An aggregator is a broad description, but in essence it’s a traditional private equity strategy applied to a certain niche.”

Abascal said the market had emerged from a hunger for exit routes from the many independent sellers who have built a very successful business over the last few years. “These are brands that challenge traditional incumbents but at one point there wasn’t a clear option for them to exit and this model has come now, pushed by the Covid spike.”

That meant that independent sellers that have built brands now have plenty of options to monetise and to continue to benefit from the vision they’ve nurtured.

Abascal said that Factory 14 looked for brand equity as a number one criteria. The company has acquired more than 12 brands since March with an average 30 days transaction closure time and the owner normally staying within the business for at least the next 12 months to concentrate on what they are good at, while Factory 14 takes over the back office operations. 

Watch the session.

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