Wholesum raises $50 million on Series A to roll up third-party sellers on ecommerce platforms – MovieUpdates

As the boom of the e-commerce aggregator trend continues in Asia, South Korea, the fifth largest e-commerce market in the world, is growing.

Wholesum, a Seoul-based e-commerce aggregator, is capitalizing on the trend of larger companies buying up third-party sellers who would normally sell on e-commerce platforms such as Amazon and eBay. The company said Tuesday it has raised $35 million in debt and $15 million in equity in a Series A round. The investment comes months after the startup raised $4.75 million in seed capital in August 2021 and $18 million in debt in November 2021, said Andrew Joo, co-founder of Wholesum.

Wholesum, which currently has five Korean local brands, plans to acquire another 15-20 brands this year in the lifestyle, health, kids and pets categories.

“The pandemic and maturing e-commerce platforms inspired the creation of 10,000 new independent brands per month in Korea,” said Joo. “Consumers’ curiosity to experiment and try new shopping experiences grew. This created brand appeal and consumer following, but led to growth that is difficult for many brand entrepreneurs to sustain. The solution to their pain points is why Wholesum exists.”

The maturity of the fintech and e-commerce platform in South Korea has fueled the growth of independent brands, Joo told MovieUpdates. In South Korea, there are about 500,000 third-party sellers on e-commerce marketplaces such as Coupang, eBay, SSG.com, cafe24, and Naver SmartStore, but the third-party sellers face three main problems: no access to growth capital, lack of recruiting challenges, and a steep marketing learning curve. , said Jo.

To address the issues of local small brands, KB Ham, who previously worked at the Coupang and South Korea-based fashion brand distributor LG fashion, and Joo, who has a background in finance and private equity for nearly two decades, co-founders of Wholesum in 2021. †

One of the value propositions for the third-party sellers is that they can take the proceeds from the sale of their brands and create a new brand, which may be more in line with their values ​​or passion, Joo told MovieUpdates. “Maybe a brand they couldn’t do when they started their first brand because they didn’t have the capital or didn’t understand the value chain like manufacturing, fulfillment and delivery,” Joo continued.

“The last decade was the time to invest in the growth of online marketplaces, but now is the time to leverage that global infrastructure and invest in the e-commerce value chain segment, such as brands and D2C sales, where we be everywhere in the world,” said Ham.

Whole grain

Whole grain

“We think our total addressable market is about 45,000 brands generating more than $1 million in sales per year,” Joo told MovieUpdates. “Organic growth for our brand portfolio has been strong since the acquisition, but it’s still in its infancy, so we think we can hit 30-40% year over year once we’re on track. Our acquisitions ranged in valuation from $250,000 to $6 million.”

Wholesum says it does not see the number of acquisitions as the most important performance indicator.

“We acquire and scale brands; but at our core, we honor brand owners and their product achievements through post-acquisition organic growth and hope to inspire the next cycle of entrepreneurs looking to transform their passion into a sustainable brand with the opportunity to one day join Wholesum,” said Joo in the statement of the company.

Wholesum’s go-to-market strategy focuses on discovering made-in-Korea brands that primarily sell on local e-commerce marketplaces, Joo said. That doesn’t mean Wholesum doesn’t have an eye for overseas markets, he said, adding that it’s acquiring Korean brands with the potential to scale up in global markets, including Lazada, Shopee, Amazon and Mercado Libre.

The latest funding was led by Kingsway Capital, Antler Global and Widus Partners, with participation from previous lenders Nordstar and Bass Investment. New investors KSV Global and Bold Ventures also joined the round.

“By partnering with high-quality brands, backed by data-driven insights and strong operational acumen, we believe Wholesum will extend its lead as a leading player in this large, underserved and idiosyncratic South Korean e-commerce market,” said partner of Antler Global. Teddy Himler.

Show Love ❤️