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Advent, SoftBank Back Private-Label Company Merama

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(Bloomberg) -- Merama, an acquirer of private label businesses on Amazon.com Inc. and MercadoLibre Inc., has raised $225 million in a funding round backed by private equity firm Advent International and Softbank Group Corp.

It’s the startup’s second major funding round since it was founded about nine months ago. The company now has a valuation of $850 million, according to a statement provided to Bloomberg News.

The investment is the latest to flow into a category of companies searching for sellers on Amazon and other e-commerce websites that make products that can be turned into big brands.

The company, which is based in Mexico City and Sao Paulo, was founded by U.S.-born Chief Executive Officer Sujay Tyle. He started Merama after selling his last startup, used car marketplace Frontier Car, to Naspers in 2019 in a deal that valued it at about $700 million.

Merama’s business model is to acquire local companies in Latin America that make popular products sold online. After it buys the brands, it improves the marketing, product development and supply chain management.

Thrasio, Perch

Advent, one of Merama’s new backers, is also an investor in Thrasio, which does the same thing in other regions, while SoftBank has invested in the player Perch.

Thrasio had been in talks to go public via a blank-check company, Bloomberg News previously reported.

Tyle said Merama is profitable and it’s on track to reach $300 million in revenue this year. The most popular product areas right now in Latin America are related to pets, exercise and consumer electronics, Tyle said.

Merama is focused on the Latin American market. SoftBank has made a major bet in the region, saying it would invest billions. SoftBank Latin America managing partner Paulo Passoni, is joining Merama’s board while Alex Szapiro, head of Brazil for SoftBank Latin America, will be an observer on the board.

Fragmented Market

Advent’s Wilson Rosa, the firm’s head of retail and consumer investing in Latin America, is also joining the board. His firm has invested in the region for 25 years and sees potential in the e-commerce market there, which is still fragmented and where Amazon.com isn’t a dominant player, Rosa said in an interview.

Merama has acquired about 20 brands so far.

“We like the progress the company has made,” Rosa said. “It’s profitable from day one.”

(Updates first paragraph to correct spelling of MercadoLibre)

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