Report: Apollo Seeks Buyer For Amazon Brand Aggregator Perch

Apollo Global Management is reportedly second-guessing its investment in Amazon brand aggregator Perch.

The private equity firm in 2001 pledged up to half a billion dollars in debt to Victory Park Capital, which invests in multiple aggregators, Perch among them.

Now, as Bloomberg News reported late Friday (Sept. 1), Victory Park is seeking a buyer for Perch, according to sources familiar with the matter. The sources added that Apollo has gotten more involved in the sale as Victory Park has thus far not succeeded.

The report notes that the aggregator sector has cooled amid rising interest rates and costs and slowing online demand. PYMNTS has contacted Apollo for comment but has not yet received a reply.

It’s a big change from the situation PYMNTS described in 2021, when companies like Thrasio, Perch and Elevate Brands had raised more than $2.3 billion in funding to acquire and expand these third-party sellers’ brands.

During the boom period, venture capitalists were “throwing hundreds of millions of dollars at these unproven companies to acquire Amazon small-fry businesses,” WebDealsDirect CEO Adam Feinberg told PYMNTS.

But before? “No one trusted an Amazon business as far as they could throw it,” Feinberg said. “They just thought it was the riskiest thing in the world.”

Fast forward to 2023,  and many of the companies have been forced to look for debt relief or consider merging, the Bloomberg report said.

Last week saw the news that New York-based eCommerce company Benitago — which acquires small third-party sellers on Amazon’s online marketplace and runs them as a group — had filed for bankruptcy.

A report by the Wall Street Journal said Benitago had faced challenges as consumer preferences changed and the eCommerce market shrank in the later stages of the pandemic.

Financing for acquirers fell by 88% last year, with just five funding deals completed in the first five months of 2023, that report said. Business analytics firm CB Insights has said the market is “unraveling,” with debt-ridden aggregators putting their investors at risk.

Meanwhile, PYMNTS looked last week at Amazon’s new partnership with Shopify, which lets merchants who pay for Shopify’s eCommerce tools use Amazon’s logistics network.

“The tie-up underscores the ways in which logistics and fulfillment can be the needle and thread that link platforms together,” that report said. “Buy with Prime is the commonality here, where Shopify merchants in the United States will be able to speed delivery to Prime members.”