The Fortia Group: ‘30 takeovers in 2022’
The Fortia Group assists Amazon merchants looking to sell their ecommerce business. After one year of operations they have closed 7 takeovers, the highest being valued over 16 million euros. CEO Emmett Kilduff: “We are on track to complete 30 deals in 2022.”
The Fortia Group wants to become ‘the leading investment bank of ecommerce’. The Dublin-based company advises on exits valued between 1 and 100 million dollars (900 thousand and 90 million euros). The M&A firm is riding the Amazon aggregator wave, a new business model that started in 2020 and is growing fast.
Annual sales close to €2 million
The Fortia Group began operations exactly one year ago, in May 2021. So far they have closed 7 acquisition deals. “The highest was valued over 16 million euros and the lowest just over 900 thousand euros”, says CEO Emmett Kilduff.
“Pet-related business is being valued at a premium.”
The companies in question are Amazon sellers of the categories baby, bed, sports, beauty and supplements with annual sales close to 2 million euros. “Pet-related businesses are also a key focus of ours, as these are currently being valued at a premium.” Merchants are mostly from the United States as well as Europe.
Before acquisition, the Fortia Group advises sellers in the lead-up to their exit. “The process is extensive”, Kilduff says. “One of the more challenging parts is the validation of inventory costs and how wider increases in supply chain overheads over the past 12 months have impacted the business.” The acquiring parties are mostly aggregators, private equity firms, businesses or individuals.
Amazon aggregator trend
The M&A advisor is part of the aggregator trend in ecommerce, a new business model that started in 2020 and is growing rapidly. These aggregators acquire online sellers and scale their businesses up. Currently there are 99 Amazon aggregators worldwide that have raised a whopping 14 billion euros to date, according to Marketplace Pulse.
Amazon aggregators have raised 14 billion euros to date.
The rapid growth also raises concerns of a bursting bubble. For example, Thrasio, an aggregator that famously raised billions of dollars, had employee layoffs. In addition, acquisitions of several aggregators have recently slowed down.
The Fortia Group’s CEO says that capital is not a hurdle at the moment, though. “Instead, the biggest hurdle is time. Buyers are seeing tens of deals each week. We present our client data in a format that enables buyers to quickly understand the investment opportunity presented and ensure they prioritise our client acquisition over the other deals they have on their desk. ”
New investment branch
The Fortia Group does not seem worried. In fact, the firm recently launched a new ‘investment syndicate’ that seeks out equity stakes in ecommerce aggregators. Its first investment is an Amazon acquisition company focused on beauty products under the name ‘Founded Brands’.
The investment branch seeks out equity stakes in ecommerce aggregators.
The new investing branch is supposed to help the Fortia Group become ‘the leading investment bank of ecommerce’. However: “We continue to focus on helping ecommerce entrepreneurs successfully sell their business”, says Kilduff. “With our current pipeline of mandated clients and prospects at engagement letters, we are on track to complete 30 deals in 2022.”