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Walmart’s Flipkart to cover insurance for all sellers in India and waive additional fees

Walmart-owned Flipkart is exempting storage and cancellation fees for sellers on its marketplace and also providing them with insurance coverage as the top e-commerce platform in India looks to maintain cordial relationships with more than 300,000 sellers who are facing severe disruption amid an unprecedented rise in the spread of coronavirus infections in the South Asian nation.

The Bangalore-headquartered firm said Friday evening that it is exempting storage fees to sellers who use the company’s fulfilment centres, and also waiving off the cancellation fees until the end of the month. (Several Indian states, as they did during the first wave of the virus, have imposed restrictions on sale and delivery of non-essential items.)

Flipkart will bear 100% premium of COVID insurance to all sellers that transact on the platform, covering any hospitalization and consultation fees between 50,000 Indian rupees ($685) to 300,000 Indian rupees ($4095).

The news today comes a week after Amazon, Flipkart’s chief rival in India, announced it was waiving 50% of the referral fee sellers are required to pay the e-commerce firm for this month, though not all sellers are qualified to avail this benefit. (The company said earlier this week that it was also postponing Prime Day in India and Canada due to the growing cases of the infection.)

Flipkart said it is also making it easier for sellers to access working capital from the firm without any incremental cost, though it did not specify the steps it had made.

It is also extending the window for the Seller Protection Fund to 30 days (from 14) to make claims on returned products. Flipkart said it will also ease its policies and performance metrics to ensure that they are not impacted by state-led lockdowns.

Flipkart, which as of last year was working to go public this year, said it has partnered with Vriddhi, Walmart’s Supplier Development Program in India, to organize webinars for small businesses to share best practices to ensure safety of workforce and provide insights to stay afloat amid the crisis.

“Through these testing times it is our constant effort to support our seller partners who face immense operational challenges as a result of the pandemic. As a democratic marketplace, we want to ensure that our lakhs [hundreds of thousands] of seller partners are able to continue operations and keep the economic engine running,” said Jagjeet Harode, senior director and head of Marketplace at Flipkart, in a statement.

“With them and their family’s financial and health safety in mind, we have rolled out these initiatives that will bring them the much-needed respite to keep their businesses active.”

India has been reporting over 400,00 daily infections this week, more than any other nation, as the world’s second-most populated nation struggles to contain the second wave of the virus. Scores of firms, startups, investors and people alike are uniting to help the nation fight the virus, which has severely impacted the healthcare facilities.

Berlin’s Razor Group raises $400M to buy and scale Amazon Marketplace merchants

The market remains very hot for startups building e-commerce empires by consolidating independent third-party merchants that have gained traction on Amazon’s Marketplace, and in the latest development, Razor Group — a Berlin-based startup buying up promising Amazon sellers and scaling them into bigger, multi-channel businesses — has closed financing of $400 million to scale its own efforts in the space.

Around $25 million is coming in the form of equity to grow its business and $375 million is in debt to make acquisitions, with target businesses typically already pulling in between $1 million and $15 million in annual revenues.

Razor Group itself is not even a year old but has been building out its business at a fast pace. Founded in August 2020, in the last eight months, CEO Tushar Ahluwalia said the startup has grown to 107 employees across four offices and is currently on track to cross $120 million (€100 million) in sales from the 30 brands it has already amassed in its stable in categories like personal wellness, sports and home and living. Assuming the debt capital it’s now raised is put to use, Ahluwalia believes Razor Group will cross $480 million (€400 million) in sales in the next 12 to 15 months.

As a point of comparison, Thrasio, one of the older players in this current market, was founded in 2018 and has 100 brands in its stable.

Indeed, there are, as you might have seen, a lot of others in the market pursuing the “FBA rollup” model — consolidating businesses that have been built on the back of Fulfillment by Amazon, with the pitch being they can apply more sophisticated economies of scale, analytics and management to grow great cottage industries into high rises, so to speak. But Razor believes its point of differentiation is its focus on technology to improve its responsiveness to the market, both when it comes to identifying and buying brands, and then growing them.

It’s a big opportunity. By one estimate there are about 5 million third-party sellers on Amazon today, and their ranks are growing exponentially, with more than 1 million sellers joining the platform in 2020 alone. Thrasio has in the past estimated to me that there are probably 50,000 businesses selling on Amazon via FBA making $1 million or more per year in revenues.

“It’s perfectly acceptable to build an FBA-based business, but at some point you can move beyond that,” Ahluwalia said in an interview. “We want to transform what we see as the levers of business operations in this space. We don’t see ourselves as the next P&G, but a new version of it, building microchampions in micromarkets, identifying underpriced digital real estate. Just thinking about it as abritrage is not enough.”

The funding, a mixture of equity to invest in the startup itself and debt to use for acquisitions (and it is mostly debt), is being led by funds and accounts managed by BlackRock and Victory Park Capital (“VPC”) as well as its existing shareholders, a list that includes a number of individuals as well as VCs such as Redalpine, FJ Labs and Global Founders Capital, the VC firm co-founded by the Samwer Brothers, also behind the well-known Berlin e-commerce incubator Rocket Internet.

Ahluwalia and Razor’s head of finance Christoph Gamon — who together co-founded Razor with CTO Shrestha Chowdury — are both Rocket Internet alums, and Ahluwalia and Chowdury also worked on a previous e-commerce business in India called StalkBuyLove (a clone of Wanelo — short for “Want Need Love” — for India, I think) that ran out of cash and shut down.

All of that speaks to both the inroads that the founders may have had into gaining some early financing from other Rocket alums and others, as well as their experiences, both good and bad, of what it takes to grow and scale e-commerce businesses.

Including the $25 million in this latest tranche, the funding brings the total raised in equity by Razor Group to about $40 million — with the previous money being used to get the ball rolling and “validate the model”, Ahluwalia said. It’s not disclosing its valuation today but he confirmed it’s also raising another, larger equity round when it will be speaking more about that.

Meanwhile, the huge injection of debt financing it is getting for acquisitions — doubled after its original plan to raise $200 million got a lot of interest — is a sign not just of what investors and Razor Group itself see as an opportunity, but also of the encroaching competition from other roll-up players that are also well capitalized also setting their sights on buying up the most promising independent businesses selling via Amazon and other marketplace providers.

That list of competitors is getting longer by the day. It includes Thrasio, one of the first startups to identify and build out this space, which has raised very large rounds in rapid succession totaling hundreds of millions of dollars in the last year, and is profitable; Branded; Heroes; SellerX; Perch; Berlin Brands Group (X2); Benitago; and Valoreo (with its backers including Razor’s CEO).

The opportunity is also breeding other e-commerce startups like Jungle Scout, which has also raised $110 million recently, providing tools to some of those third-party sellers to help them stay, in fact, independent (or at least grow more to be more valuable to acquirers)

Razor believes that its ability to stand out in this crowd will not just be based on how much money it has to spend, but on the technology that it is using to identify the best third-party sellers faster in order to roll them up first, and then to leverage that early move by giving those companies better tools to grow faster.

Chowdhury describes the platform that she has built as “M&A 2.0”, a system that performs “massive due dilligence” at machine scale by evaluating some 1 million companies each week as they perform on platforms like Amazon’s. “Technology runs through the whole business,” she said, started with the acquisitions, where Razor is identifying the most interesting companies faster than others, she said. “We look at thousands of data points,” building algorithms, she continued, “to flag what we want to acquire. It means that our acquisitions funnel is 99% sourced directly and we don’t rely on brokers.” Brokers, she said, are something of a unspoken part of this area, but bypassing them means less competition and better pricing.

Being early also means building better relationships with the owners of these businesses, with less time pressure.

“Dealmaking is something extremely personal,” Ahluwalia said. “A seller needs to like you. Our calculations have allowed us to be the first in these deal conversations”

Further along, that data will also help Razor build those businesses and figure out where else brands can be sold beyond Amazon and how to sell them better.

That is a plan that has yet to be proven out, given the age of the company, but investors — adding up the numbers and track record of these founders, and the tech they have built — are willing to bet on this one.

“We are excited to partner with Tushar, Chris, and the rest of the Razor Group team. The ability to identify, underwrite, integrate and ultimately create tangible value across a broad suite of eCommerce assets is a real competitive advantage in the marketplace,” said Tom Welch, partner at VPC, in a statement.

“We are pleased to make this investment in Razor Group to support the company’s strong growth momentum as it continues to diversify its portfolio of brands and expand into new markets,” added Dan Worrell, MD at BlackRock.

Amazon’s over-the-top business, including IMDb TV and Twitch, tops 120M monthly viewers

Amazon’s free, ad-supported streaming service IMDb TV is getting its own mobile app. The company announced the news today at its first-ever Newfront’s presentation to advertisers, where it also shared that its over-the-top streaming businesses combined — meaning, IMDb TV, Twitch, live sports like Thursday Night Football, Amazon’s News app, and others — have now grown to over 120 million monthly viewers.

IMDb TV viewership, in particular, jumped 138% year-over-year, Amazon noted.

The ad-supported service, which likely benefited from the same pandemic bump that drove streaming service viewership higher across the board last year, is something of a rival to other free, ad-supported streamers, like Fox’s Tubi, ViacomCBS’s Pluto TV, or Roku’s The Roku Channel. However, more like Roku’s hub, Amazon leverages IMDb TV to help it sell its own media devices by promising users easy access to free, streaming content.

Today, that’s resulted in the IMDb TV app seeing the majority of its usage on Fire TV. But over the past several months, the app has become more broadly available, with launches on Roku, Chromecast with Google TV, PlayStation 4 consoles, Xbox One and Series X devices, LG Smart TVs, Nvidia, Sony Android TV, and TiVo Android TV devices, Amazon says.

Now it will get its own dedicated mobile app, as well, instead of only a small section inside the IMDb app where the service’s content can be found today on smartphones. The new standalone app will arrive this summer on both iOS and Android, says Amazon.

Amazon also told advertisers about IMDb TV’s current user base, noting that 62% were in between ages 18 and 49. And they spend 5.5 hours per week on the app, on average.

The forthcoming mobile launch was one of several announcements Amazon made today at its Newfronts presentation today.

The company also detailed its upcoming IMDb TV slate, including unscripted series Luke Bryan: My Dirt Road DiaryBug Out and Untitled Jeff Lewis Project as well as scripted releases Blessed and Highly Favored, Greek Candy, Primo, The Fed, and The Pradeeps of Pittsburgh, PA. Music duo Tegan and Sara’s memoir High School will be adapted as an original series for IMDb TV. IMDb TV also announced a new crime drama Leverage: Redemption and police drama On Call. 

IMDb TV parent company, Amazon, meanwhile, expanded its deal with the NFL for Thursday Night Football, which now run 11 seasons, starting with the 2022 season instead of the following year.