Thrasio

OpenStore: instant offers to buy your Shopify store, the Opendoor model for e-commerce

Shaan pitches OpenStore (Keith Rabois and Jack Abraham) as Opendoor for e-commerce: plug into a Shopify store's data and give the owner an instant buyout offer with no banker, deck, or process — rolling up Shopify stores the way Thrasio rolled up Amazon FBA businesses.

“OpenStore is the same thing for e-commerce. They're saying, you want to sell your e-commerce company? I'll buy your Shopify store right now. You don't have to go through the whole banker process, make a deck, do, do all this stuff. I'll just plug into your data and I'll just give you an offer right now. And so what they're trying to do is roll up Shopify stores.”

Steal thisApply the instant-liquidity model to any market of small sellers: plug into their data, skip the broker process, and make an instant cash offer to roll them up.

Roll-ups like Thrasio use debt to buy already-profitable businesses

Shaan explains the capital efficiency of e-commerce roll-ups: Thrasio reached a planned $10B exit in ~3 years by financing acquisitions with large amounts of debt, which works because the target companies are already profitable and producing revenue.

“3 years old and very capital efficient how they went there because they used a lot of debt to buy these companies because the companies already are profitable or producing a lot of revenue. So they're able to use big debt to do this. And so Open Store is doing the same thing without the Amazon style. It's for Shopify..”

Raisins and turds: diversifying junk Amazon FBA roll-ups

Andrew is skeptical of Amazon FBA roll-ups (like Thrasio) buying businesses at 1.5–2x earnings, arguing a diversified portfolio of moat-less businesses is still bad — invoking Munger: combine raisins with turds and you still have turds.

“I think Charlie Munger said, what is it? If you put raisins with turds, you've still got turds. It doesn't matter if you group together a bunch of shit, it's still shit. We've looked at tons of these businesses. They're They're sandcastles.”

Thrasio raised ~$100M at a $750M valuation buying up Amazon brands

Thrasio, a two-year-old company that acquires Fulfilled-by-Amazon brands and improves them, raised close to $100M at a $750M valuation. Sam frames it as a fast-growing roll-up of FBA businesses.

“On Tuesday, Sean and I talked about Thrasio. It's a company that raised money. They raised, uh, $100, $200 million at a $750 valuation.”

Thrasio: $200M+ revenue, $35M EBITDA, $780M valuation in 2 years

Shaan breaks down Thrasio, the Amazon FBA roll-up. The holding company reports over $200M gross revenue and $35M trailing-12-month EBITDA, with the $780M valuation being 30x what it was 18 months prior.

“So the holding company, uh, they say their gross revenue is over $200 million. And they have $35 million in trailing 12-month EBITDA. So $35 million of EBITDA in the last 12 months”