HeyDay helps e-commerce entrepreneurs build brands, raise funds, or sell their businesses.

Heyday, the platform which provides e-commerce sellers with technology, tools, and resources to build brands, emerged from stealth and raised $ 175 million. Investors included General Catalyst, Khosla Ventures, Arbor Ventures, and executives from Amazon, eBay, PayPal, and Magento.

Sebastian Rymarz and Adam Gerchen founded Heyday in August. (Forbes)

Amazon third-party sellers are now an e-commerce force

Third-party sellers on Amazon (NASDAQ: AMZN) generate nearly 60% of its product sales. However, they tend to not grow beyond a mom-and-pop store size and are now being targeted by investors for acquisition, brand-building, and scale.

In July, Thrasio, one of the largest online sellers and acquirer of private label businesses on Amazon raised $260 million in a Series C funding round led by Advent International. The funding achieved a pre-money valuation of $1 billion for Thrasio.

In a sign of what is possible, Thrasio has spent more than $ 100 million over the last two years buying up nearly 100 businesses. It boosted their revenue to over $ 400 million and now sells more than 10,000 items ranging from massage guns to hiking poles.

Meanwhile, Heyday has already been active, riding the COVID-triggered boom in digital commerce. It has acquired and launched several brands, and expects to end this year with more than $ 20 million of annualized revenue. That’s fast going considering Heyday was born this August.

According to co-founder Adam Gerchen, the startup will notch up revenue of $ 200 million by the end of 2021, and $ 1 billion by the end of 2023.

“We’re in the early days of a tectonic shift toward marketplace commerce. Just as the last decade saw the rise of Warby Parker, Dollar Shave Club, and other digitally native vertical brands, this decade will see the rise of a new generation of marketplace-native brands,” said Sebastian Rymarz, Heyday co-founder and CEO. “Although the shift has been a boon to entrepreneurs around the globe, most still lack the capital, tools, and resources to realize their full potential. Heyday is filling that void.”

Filling a void

The founders observed that sellers on Amazon were usually hamstrung by the nonavailability of finance, technology, and branding assistance. They could hence not scale up their businesses.

Though Amazon provided many tools for such entrepreneurs, these were not enough. Besides, there were not many avenues available for these platforms sellers to dispose of their businesses.

“Heyday is building a data-driven technology platform that can help those brands reach real scale leveraging those marketplaces,” said Mark Crane, partner at General Catalyst.

Across the Atlantic, Heroes, a European start-up that has a similar strategy of acquiring and scaling up successful Amazon businesses, raised $ 65 million in a funding round last week.

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