Thrasio is a large and fast-growing acquirer of small consumer product companies that are part of Amazon's Fulfillment by Amazon program (FBA). They recently raised $260 million in a funding round that values the company at $1 billion.
Thrasio's business model is fairly straight forward. They find and buy category-leading consumer product small businesses that operate on Amazon's platform.
Key quote from Crunchbase's article on Thrasio's recent funding:
"... the company has acquired nearly 60 Amazon businesses, including 17 in the last quarter. In addition, more than $300 million in pro forma revenue and 6,000 products, makes Thrasio one of the top 25 sellers on Amazon ..."
After acquiring the firms, they integrate them into their systems and marketing programs. This makes the individual firms more efficient and provides Thrasio with economies of scale.
One of the things we find most interesting about Thrasio is they are building a platform business on top of Amazon's FBA platform. This "platform on a platform" business model is not rare, but still somewhat unusual. And even more unusual is Thrasio's size and ambitions.
Most platform on a platform companies are relatively small. Thrasio is looking to be a very large firm and has the financial backing to do so.
Thrasio's success will likely lead to others following its roll-up approach. These new entrants will add layers of business complexity for anyone operating on or running a business platform or ecosystem.
Thrasio itself, of course, has to dance with an elephant (Amazon) without getting crushed. But small businesses in the FBA program now have to contend with both Amazon and Thrasio - as well as potentially a number of Thrasio imitators.
In our Top 10 Small Business Trends of 2017 we wrote:
Platforms have become so important that small businesses need a platform strategy. For most this will consist of identifying the best platforms to participate in and the right ecosystem roles to play. These decisions will increasingly play a key role in small business success.
This has become even more true today.