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Thracio, the American startup that raised billions of dollars and popularized the concept of e-commerce bundling — buying and restructuring dozens of small brands and third parties that sell on marketplaces like Amazon in an attempt to achieve better economies of scale — has begun a restructuring process of its own. The company has Filed for Chapter 11 bankruptcy protection To cut its losses on a mountain of debt. It said it also secured $90 million in emergency financing from unnamed existing lenders.
Thrasio has raised more than $3 billion in equity and debt over the years to support its business, and its collapse into bankruptcy protection is one of the biggest examples of how powerful growth-stage technology companies have fallen in recent times.
The restructuring support agreement covers 81% of Thrasio’s revolving credit facility lenders and 88% of its term loan lenders, and will erase approximately $495 million of its existing debt, in addition to deferring all interest payments in the first year, the company said. Post exit from Chapter 11.
It said the new capital of $90 million “is expected to provide sufficient liquidity to support the company throughout this process and beyond.” In particular, the financing will enable the continued operation of Thrasio’s brands, support ongoing business operations and provide the company with access to new capital upon exit from Chapter 11 to support future business operations. More details about the restructuring here.
This news shouldn’t come as a surprise: the company’s impending bankruptcy has been rumored since last year. Since 2022, the company has been laying off employees and taking other steps to restructure its business such as withdrawing from certain markets.
We’ve reached out to Thrasio to ask if it plans to lay off more employees with today’s news and will update this post as we learn more.
“Over the past year, we have made significant progress in transforming the business and advancing our goal of delivering hundreds of brands to millions of customers,” Thrasio CEO Greg Greeley said in a statement. “We are taking steps to build on this progress by strengthening our financial position and working with our lenders to support our future success. Thrasio is one of the largest third-party sellers in the Amazon marketplace, and with a strengthened balance sheet and new capital, we will be better equipped to support our brands, expand The scope of our infrastructure and enabling future opportunities.
Thrasio overall has been the victim of a perfect storm of market conditions as well as its own business model.
Amid the significant downturn in fundraising that hit privately held tech companies starting at the end of 2021 (and still continuing), late-stage companies that were desperate to stay afloat but were not in a position to IPO , especially in a difficult situation. Tight fastening to stay afloat.
Thrasio was a case study in late-stage “startups”: Over several years, it raised more than $3 billion in funding via equity and debt rounds — money it raised from investors like Silver Lake, Oaktree, Innova, and many others — for itself. Buying a wide range of small e-commerce companies that were designed to operate on the infrastructure to meet Amazon’s needs, but with no desire to continue and scale those enterprises on their own.
Thracio’s idea, the same idea used by many other companies still on the market today, was that by buying the best of these companies – there are millions of them in the world – production, distribution and marketing could be combined. It will have unprecedented access to data that can be used across the wider business to improve overall results. It can build new technology to improve that larger process.
“Our business is getting better as it grows, and these investments will be invaluable as we continue on this path,” co-founder Carlos Cashman said in 2021, when he was still CEO. At the time, the company had just raised $1 billion at a $10 billion valuation, she said. Josh Silberstein, another co-founder (who is no longer a member of the company), told TechCrunch in 2021 that Thrasio made a profit of $100 million on revenue of $500 million in 2020.
None of this went as planned, as you can probably imagine. Uniting disparate companies is arguably not easy. Consumer tastes for goods are changing all the time, and on top of that, e-commerce has seen a lot of pressure due to the tightening economy, which means it is difficult to achieve sales targets on what may be a fluctuating cost base.
There were layoffs and a change in leadership, which led to Greeley’s hiring in 2022. By September 2023, the secondary market company became Forge Global appreciation The valuation of Thrasio – which had already postponed its IPO plans due to its finances and the state of the IPO market – had dwindled to just $193.9 million. (I note that even in 2022, the amount was “only” $4.5 billion, not the $10 billion the company said it was.)
Thrasio is the most notable company that has collapsed, but along with companies such as Branded, Berlin Brands Group, SellerX, climaxHeroes, Perch and more have collectively raised over $1 billion to jump into the collecting race, so it’s unlikely to be the last?
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