Thrasio, a US-based unicorn, has created a buzz due to its unique operations of funding selective online brands. The startup also received $100 million as a profit last year. In the startup ecosystem, it is now known as the Thrasio model. Over $300 million has been invested in Indian startups based on the Thrasio concept.
What is Thrasio and How It Works?
Founded by Joshua Silberstein and Carlos Cashman in 2018, Thrasio looks for online brands that are selling on Amazon. The startup contacts them for collaboration and also acquires them.
Overall, Thrasio has clocked a revenue of over $500 million in 2020. And as a new startup, earning a profit of $100 million within three years tells the success story of a unique concept brought by Thrasio.
Thrasio valuation has also skyrocketed. As per the Bloomberg report, the unicorn startup was valued at $3 billion in February 2021. And one month later, its valuation surged to $3.5 billion.
On the Thrasio model, plenty of online startups are receiving secret financing help offers. The concept is new in the Indian startup ecosystem and has become very active in the last 3 months.
Most of the venture capitalists are offering the same deal to these online startups. As per the anonymous startup owners’ revelation, the investors want to acquire fast-growing online firms. Later, the parent firm will grow the startup further by its technology, marketing strategies.
Beginning of Thrasio Model in India
Within three months, the Thrasio model has shown immense potential in the Indian startup ecosystem. Financial experts are considering it a new revolution in the Indian startup sector. One investor said that it is a new finding among Indian startups like Flipkart in 2008 or Swiggy in 2015.”
There is a high level of secrecy from online brands and investors. The startups are not revealing their names to get a competitive advantage. These startups are just revealing employees’ strengths and investments without telling the brand name. On the other hand, investors are also keeping mum about their acquisitions and investments in the Thrasio model.
Some startups including Mensa Brands, founded by former Myntra CEO Ananth Narayanan; GOAT Brand Labs, founded by Flipkart fashion head Rishi Vasudev; and at least six more startups have revealed their association with the Thrasio model. Recently, Narayanan, Vasudev and FirstCry founder Supam Maheshwari have also announced funding raise of $150 million.
Powerhouse91 based on the Thrasio model and backed by Snapdeal’s Kunal Bahl and Upscalio, founded by ex-Purplle Chief Marketing Officer reported by The Economic Times, The CapTable, and Entrackr.
10 Club and Evenflow are the other two key players who are strengthening their Thrasio model. As per an insider person report, Evenflow’s Agarwal has spoken to 400 Amazon sellers in the last six months to acquire online brands who are selling on e-commerce platforms like Amazon, Flipkart, etc.
As per the Bain report, India had over 100 million e-commerce users in 2020. More than 10,000 online Indian brands are active on e-commerce platforms.
Opportunity is huge for the Thrasio model-centric startup system. Last year, Amazon India said that it had 4000+ sellers with annual revenue of above Rs 1 crore. If 15 Thrasio-model startups buy 20 brands each in the next 12 months, that would still be a small portion of total sellers. Hence, the Thrasio oriented players have a big ground in India to play.