Amazon aggregator SellerX, which is worth over $1bn and has secured the backing of investors such as BlackRock and Sofina, has laid off staff — as a wave of layoffs sweeps the industry.
SellerX, based in Berlin, has cut around 28 jobs, a person familiar with the matter tells Sifted. It is understood the staff were let go at the beginning of May. The company has raised $750m and employs around 700 people.
Two sources within the industry tell Sifted that Dwarfs, a Dutch aggregator, has also laid off staff. LinkedIn data shows 20 people have left the company since March this year. Dwarfs did not respond to requests to comment.
Aggregators, which buy up smaller Amazon sellers and grow them, boomed in the pandemic, when lockdowns fuelled an online shopping frenzy. VCs rushed to back the startups — in October, three of Europe’s aggregators raised a combined $1bn in a single day.
But, following in the footsteps of speedy grocery and revenue-based financing, the Amazon aggregator industry has become the latest VC-hyped sector to feel the effects of the tech downturn.
The first industry layoffs were at American startup Thrasio, the poster child of the industry with a $7.5bn valuation. It laid off 20% of its staff in May.
Heroes, a British aggregator which has raised $300m, laid off 24 staff at the end of May. Berlin Brands Group, the oldest of the European aggregators with $940m raised, laid off around 100 staff at the start of June.
Despite the free flow of investor cash last year, some analysts were already warning about the fragility of the industry long term.
A whole cohort of aggregators entered the market at the same time, sparking bidding wars for the best Amazon sellers and forcing up the prices of companies to the point where buyers struggled to make returns off them.
And even if startups did acquire at reasonable valuations, the drop in consumer spending power as the cost of living increases will affect the business model.
This piece has been updated to reflect the date of the layoffs.