Jungle Scout raised $110 million and acquired Downstream Impact to help third parties sell on Amazon and other markets - Techdap -->

Jungle Scout raised $110 million and acquired Downstream Impact to help third parties sell on Amazon and other markets

Thursday, March 4, 2021

Jungle Scout raised $110 million and acquired Downstream Impact to help third parties sell on Amazon and other markets

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Aggregation companies equipped with wallets full of money quickly proliferated, consolidating the idea of ​​promising smaller merchants selling on Amazon and other markets to create economies of scale to help them sell and grow more efficiently. Now, a company that has taken the opposite action (developing tools to help Amazon sellers work better themselves) has announced huge sums of money to keep its business growing.

Jungle Scout is an Austin-based company that builds tools covering search and market analysis, inventory management, and sales intelligence services for companies sold on Amazon. It has raised $110 million in equity and used part of it for acquisitions -Downstream impact. This is an Amazon advertising expert founded by two former Amazon executives who did early work in Amazon’s internal advertising work, partly to continue developing their business.

You may not know the name, but the name Jungle Scout is quietly big. It said that its tools have impacted about $8 billion in Amazon revenue, and about 500,000 brands and entrepreneurs are already using it. Its data engine absorbs the search, purchase and other information of about 500 million Amazon products, and then converts it into data to help customers better sell on Amazon.

Jungle Scout (Jungle Scout) started operation in 2015, mainly focusing on providing optimized search tools for sellers only on Amazon-if you haven't guessed by its name "Jungle" and "Scout". Tools to improve Amazon’s business still account for most of its business, and its functions cover not only Amazon.com, but also nine other regional Amazons. But now, the startup is slowly starting to expand its services. This may include Google Shopping, Facebook's many social platforms, and more-all marketing platforms that consumers happen to use.

CEO Greg Mercer said in an interview: "We will start with Walmart and it will be put into use in the near future. Our vision is to expand further. We are optimistic about Amazon's future, but if we think further, my prediction will be Yes, in addition to the platforms where people mainly go to buy goods, there are also places where consumers spend their time, such as social channels such as Google or Instagram. -This may be other areas where we can provide sales tools."

He said the startup is also establishing its own business in China. The country is not only a commodity market, but also a merchant market, one of the fastest growing source countries.

Venture capital and private equity firm Summit Summit is the main investor in this round of financing, and Mercer himself also provided investment for this. So far, it’s not clear how much money Jungle Scout has raised: PitchBook pointed out that Summit had previously backed it in 2017 with an undisclosed total price and valuation. I have confirmed that the $110 million disclosed today is the first time Jungle Scout has disclosed how much money it has raised over the years, although it has not yet disclosed its valuation.

You may have noticed that in the first paragraph of this story, I mentioned that Jungle Scouts have taken different approaches to roll-up companies to some extent, such as Thrasio, SellerX, Branded, Heyday, Heroes, Perch, Companies such as Berlin Brands Group. There is no doubt that others are raising huge sums of money to find sources, and then cooperate or purchase with third-party sellers.

Jungle Scout does provide a valuable service for Amazon retailers who are using the giant’s FBA platform to manage a series of services, such as inventory, transportation and marketing (sell goods in the same way that they appear on Amazon. ) And want to remain independent and not to be "rolled up".

However, this is actually not all. Mercer told me that his company also provides its technology as a white-label service to most large integrated companies-he did not notice some of them-so you might also say that even if a third-party merchant does not work directly with Jungle Scout cooperates, and they may eventually do this indirectly.

The opportunity to build more tools to deal with the Amazon economy is huge. As we pointed out before, it is estimated that the number of third-party sellers on Amazon is currently about 5 million, and this number seems to be growing exponentially. Last year, more than 1 million sellers joined the platform. . This includes not only smaller retailers seeking to expand consumer touch points, but also a growing number of large brands that are now studying how to use Amazon to better sell directly to consumers on the platform instead of through Third-party sales. Party businessman.

In this regard, advertising is still a huge and growing part of the equation.

If you are an Amazon user, then you will notice that the number of ad search pages has been growing over the years (these are sponsored results that you might search for at the top of the product), so you won’t be surprised, therefore, advertising is for Amazon In itself, it is indeed growing rapidly.

In 2020, advertising alone created an annual revenue of $21.5 billion for Amazon, an increase of 66% year-on-year.

Downstream CEO Connor Folley co-founded the company with Salim Hamed, another former Amazonian (he is the CTO of Downstream). He told me that advertising "within Amazon itself" still accounted for a large proportion of this number. Part, although it will continue to invest in its DSP and other areas to expand its own ecosystem. This makes it a dark horse in the advertising world, and so far, it has been paying more attention to Facebook's rise among the "new" participants.

He said: "In the past five years, the explosive growth of Amazon advertising has exceeded many people's expectations." "By 2023, it may be a $50 billion platform, much larger than Facebook."

Although there are many companies that provide sellers with ways to build tools and alternative products to better control sales on Amazon, part of the appeal here is the size of the Jungle Scout and its foresight in establishing this market.

"Jungle Scout was one of the first companies to find opportunities to provide SaaS-based tools to help companies and brands expand their e-commerce footprint in Amazon and other regions, and the company has established this leadership position over the past few years," He said. Summit partner resident technical expert and director of the Jungle Scout Board of Directors Neil Rothman in a statement.

He said: "In the past five years, the explosive growth of Amazon advertising has exceeded many people's expectations." "By 2023, it may be a $50 billion platform, much larger than Facebook."

When you consider that Rothman himself is also a former Amazonian, this is a very confident vote. He served as the company's vice president of technology from 1998 to 2007, dedicated to market technology and other aspects. "We believe that Jungle Scout's technology is powerful and highly scalable, and is designed to help the company grow with the expansion of Amazon's third-party sales ecosystem. We believe that increasing downstream influence will increase product and engineering capabilities. We are very happy to become a company. Part of the development journey."

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