Hasaan
02/23 14:51
Startups Merge In Spaces Where Funding Has Fallen
This year, it’s generative AI. A couple years ago, there were many niches where funding flowed, including areas like D2C, homebuying, and consumer fintech.
But hot sectors often don’t stay that way, especially in areas where the biggest rounds occurred close to the market peak. Now, in spaces where investment has shriveled, we’re seeing heavily funded startups merging with former rivals and others in a bid to stay competitive or simply stay afloat.
Sectors for startup consolidation
To highlight, we used Crunchbase data to identify startups that raised large sums in the past few years and have since sold to another private company in the same or similar industry. We then narrowed the list to sectors where venture funding has plummeted.
With that in mind, here are some of the industries and companies that made our list.E-commerce aggregators
In 2020 and 2021, investors poured billions into e-commerce aggregators. Heavily funded companies like Thrasio, Perch and Razor Group used the money to buy up smaller brands and ramp up their sales on Amazon and other retailers.
But funding to the space dried up when the market took a downward turn beginning in 2022, with many publicly scaling back and cutting staff. Then came a wave of consolidation.
Berlin-based aggregator SellerX was an early mover, snapping up Austin, Texas-based Elevate Brands a year ago in an all-stock deal at an undisclosed valuation.
Razor Group, another Berlin-based aggregator, has also been acquisitive. The company purchased four e-commerce brand roll-up startups to date, including a March acquisition of Boston-based Perch, a SoftBank portfolio company that had raised over $900 million.
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