SellerX, a major Amazon aggregator in Europe with $266 million in funding, appears to have acquired ReviewMeta, a website for verifying the authenticity of reviews on Amazon.
SellerX is currently listed as the developer of ReviewMeta on major app stores, including the Google Play store. SellerX did not respond to a request for comment from Modern Retail, but the former owner of ReviewMeta confirmed to Modern Retail that he recently sold the business, though he said he couldn’t disclose a name.
The acquisition is noteworthy because it’s one of the first times that a major Amazon aggregator has acquired a service-oriented company — rather than a product — in the Amazon ecosystem. Other examples include Thrasio acquiring Yardline, a fintech company that offers fast-growing sellers monetary advances in order to scale their businesses. (Thrasio was initially an investor in Yardline before acquiring it outright in June.) In July, Perch bought Web Deals Direct, an Amazon seller that, unlike most others, operates its own, 230,000-foot warehouse.
These acquisitions might be the first of many more to come. Aggregators can turn to ad agencies and analytics companies for deeper insights and expertise on running an Amazon business. But, once aggregators own a certain number of brands, it starts to make more financial sense to bring these capabilities in-house. It also gives them another avenue through which to spend the significant amount of venture capital money they raise, whether through hiring or direct acquisitions
Mark Daoust, CEO of Quiet Light Brokerage, which handles deals between third-party sellers and aggregators, said, “I think in general the aggregators’ number one problem is access to high-quality, high-volume deal flow, how many deals can you look at for finding the best deals out there.”
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ReviewMeta, for instance, is a site with a relatively niche focus. But owning a fake review tracker could make sense at the margins for a company like SellerX. Taliesen Hollywood, whose company Hahnbeck brokers deals between e-commerce sellers and aggregators, told Modern Retail that the main use of ReviewMeta is to verify the authenticity of reviews on marketplaces, but he said that its software also allows it to track the average rating and number of reviews for a seller, across all of that seller’s products.
That matters because ReviewMeta could generate lists of Amazon sellers with the most ratings across Amazon or in specific categories, and therefore help aggregators find and evaluate potential acquisitions. A key component is being able to estimate which reviews are fake — that helps aggregators avoid brands with a history of illicit review practices, which could jeopardize the business down the line.
“Many of the aggregators are making quite large investments in areas other than the acquisition of Amazon sellers,” Hollywood said, pointing to marketing as one example. (Mostly, they are doing this by rapidly hiring employees.) He said, “the acquisition of technology like this is not surprising. I think acquiring ReviewMeta was a really smart move.”
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Over the last few years, aggregators have amassed an eye-popping amount of funding — over $9.6 billion in total. Between that and the fact that Amazon is a notoriously complex ecosystem, there is plenty of reason to think they might buy more agencies and data companies focused on e-commerce growth. These acquisitions could help them find and acquire new brands on marketplaces — they could also help them scale fulfillment, advertising and sales on the products they bring into their portfolios.
Adam Pressman, a managing director in the retail practice at AlixPartners, said that though this particular acquisition by an aggregator of a service-oriented company “is probably one of the earlier ones that is happening,” he said, “I wouldn’t be surprised to see others” — especially when those acquired companies are operating in key spaces like content or advertising.
In general, Pressman said, acquiring a company focused on reviews makes sense because “getting that right and understanding how that impacts how Amazon looks at businesses.” Pocketing hundreds of millions in funding brings with it immense pressures, and the aggregators might not all have the time to build full-scale teams and data analytics from scratch.
Daoust said he’s already seen evidence of this happening. “We are seeing aggregators interested in agencies, Amazon marketing agencies,” he said. As they try to grow their products, “that’s a very natural path for them to take.”