This article shares a little more about how our friends at Olsam acquired Flywheel Commerce. It’s so interesting to get a first-hand look into what it takes for an aggregator to grow through acquisitions of other aggregators. I think we will be seeing more of this in the future.
Olsam Group, which acquires and scales e-commerce businesses, has completed the acquisition of the assets of Flywheel Commerce, a US-based e-commerce aggregator.
The acquisition will help Olsam, which recently raised $165m, further extend its footprint globally, in particular across North America. Following completion, the brands of Flywheel Commerce will continue to operate in the US and by leveraging Olsam’s expertise as a UK acquirer, expand them globally, notably into the UK and EU.
Globally in 2020, Amazon’s vast ecosystem of six million sellers generated over $300 billion in sales, growing 50% year-over-year. This grew again by 61% in Q1 of 2021, which would make this ecosystem the 42nd largest economy in the world. Firms acquiring successful brands on Amazon have attracted around $7 billion in capital over the past twelve months, with almost 3,000 sellers in the UK hitting $1 million in turnover. With more than half (53%) of product searches now starting on Amazon, compared to 23% starting on search engines, there is a huge opportunity to scale e-commerce businesses across global marketplaces
The market is still relatively young, and with a large influx of capital into the sector, this is one of the first examples of market consolidation in the Amazon aggregator space. Those that can leverage scale and operational capabilities to grow not just via acquisitions, but organically as well through international expansion, paid social, affiliate marketing and D2C, are more likely to succeed in the long run.
One of the brands joining the Olsam portfolio is Paw 5, the creator of the original Snuffle Mat. The products are manufactured by Ethical Apparel Africa, a female led NGO based out of Ghana that utilizes sustainable upcycled textiles. With design and utility patents in place, Olsam believes that by expanding the product line-up as well as by geography, Paw 5 can showcase the levers that the Company pulls across all its portfolio.
Ollie Horbye, Co-founder of Olsam, said: “The whole Olsam team have thoroughly enjoyed getting to know Jonathan and the Flywheel Commerce Team during the process. We see enormous growth potential in the portfolio of brands, in particular launching them in Olsam’s home European markets. The acquisition of the assets of US aggregator Flywheel Commerce represents a significant milestone for Olsam as we continue to deepen our presence in the US. Olsam’s operational expertise and successful track record continues to attract strong deal flow from the US and we look forward to working with many more US based sellers and aggregators seeking an exit.”