Singapore-based Rainforest, which acquires and scales Asia Pacific-based brands on Amazon, has bagged USD 20 million in a pre-Series A round led by early stage investor Monk’s Hill Ventures, bringing the firm’s total funding to USD 56.5 million. January Capital, Crossbeam Venture Partners, Amasia, Lo & Behold Group, as well as existing investors Nordstar and Insignia also participated in the round.
The news comes three months after the e-commerce aggregator secured more than USD 36 million for its seed funding in May, including a USD 30 million debt facility from private debt investor Accial Capital, and USD 6.5 million of equity financing.
With the fresh capital, Rainforest is set to “double down” on its growth strategy by acquiring more Asia-based e-commerce brands and extending their presence to Europe and the US.
“As one of the largest Amazon sellers in Southeast Asia, Rainforest is tapping into the rise of marketplace sellers off the back of a large, fast-growing e-commerce market,” said Peng Tsing Ong, co-founder and managing partner of Monk’s Hill Ventures.
Launched in January, Rainforest targets third-party sellers that have signed up for Fulfillment by Amazon (FBA), a program where Amazon manages the storage, delivery, customer service, and returns on behalf of merchants.
So far, Rainforest has acquired six e-commerce brands in the lifestyle category. The company claims that its portfolio of brands has logged more than 50% annual growth after the acquisitions.
While Rainforest did not disclose more information about its portfolio, it recently acquired a China-based brand for USD 3.6 million as part of its efforts to expand into the Chinese market. Sellers based in China accounted for 75% of the new sellers on Amazon in January, up 47% from the same period last year, according to market research firm Marketplace Pulse.
Meanwhile, Amazon has cracked down on some Chinese sellers for suspected fake reviews and other policy violations since May, with over 50,000 seller accounts being suspended, per Bloomberg.
But Marketplace Pulse commented that the crackdown will not have a huge impact on the online sales community in China. “The recent suspensions will not impact its dynamics significantly—the suspended sellers represent a tiny share of the total number of China-based businesses on Amazon. Nonetheless, the stories of Mpow, Aukey, VicTsing, Taotronics, RavPower, Fairywill, and many others sent shockwaves through the Chinese seller communities,” it explained.
Read this: 9 takeaways about Gen Z consumers from Cyanhill Capital’s 2021 mid-year consumption report