Yet Another Blow For Amazon As Marketplace Funding Dries Up

The funding for Amazon.com Inc AMZN marketplace sellers dried up as e-commerce growth has stalled.

In 2021, investors poured over $12 billion into acquisition start-ups or aggregators focused on buying Amazon marketplace sellers following the significant behavioral shift during Covid lockdowns, the Financial Times reported.

Amazon aggregators or roll-ups buy sellers who typically do the bulk of their business through Amazon's third-party marketplace aiming to combine many brands under one roof. 

Also Read: Amazon Unveils Additional Analytics and Data to Empower Seller Success

So far, in 2022, funding has dropped to just over $2 billion, most of which came before the stock market slump in March. 

Despite all the pressures, believers in the aggregate model found positive signs for the remainder of 2022 and beyond.

Shipping costs, while still elevated, are now about two-thirds below their pandemic highs.

The pressure on the supply chain has significantly eased, primarily driven by lower global demand, offering the opportunity to acquire high-caliber assets at lower prices over the next 12-24 months.

The sector has now turned to consolidation. Amazon's top U.S seller, Pharmapacks' parent Packable downsized its workforce and braced to liquidate after failing to secure new financing.

Packable dumped its listing plans via a special purpose acquisition company (SPAC) merger worth $1.55 billion as the market cooled.

Price Action: AMZN shares traded lower by 0.05% at $124.60 in the premarket on the last check Tuesday.

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