Sounds a bit like Rocket Internet's business.
Launch HN: Moonshot Brands (YC W21) – We buy and grow e-commerce companies
11–20 of 75 posts
Re: Launch HN: Moonshot Brands (YC W21) – We buy and grow e-commerce companies
#12Congrats all! Mind elaborating a bit more on how this is different than selling to some PE bros though? Also, for anyone reading this, if you’re a high income individual or have come into a windfall from RSUs/Stonk/inheritance/coin there’s marketplaces and plenty of access to brokers if you want to buy your own shop. Lot of sellers under $1MM ARR will sell their company at like 2-3x (!) which if you can just maintain…
> windfall from RSUs/Stonk/inheritance/coin there’s marketplaces
Do you recommend any specific marketplaces?
Re: Launch HN: Moonshot Brands (YC W21) – We buy and grow e-commerce companies
#13Is your goal to essentially become a conglomerate of niche e-commerce firms or do you eventually intend to resell the companies you acquire to others?
We plan to be long term holders, eventually taking the company public. We look at Constellation Software up in Canada (where Allan is based) as a great model. The entrepreneurs often stay with the company since they know the customer and product better than anyone. Then with shared resources, best practices, and talking to their peers they can grow their business.
Re: Launch HN: Moonshot Brands (YC W21) – We buy and grow e-commerce companies
#14What's the actual business model here? Y Combinator shouldn't be backing a tiny PE fund, so this can't be that. What's the angle? There must be some financial engineering in the buyout or some unique plan for post-sale.
Not saying you're wrong, but where do you see that they are backed by YC? This reminds me of Thrasio and all the similar companies that have had success with buying Amazon businesses. I assume they have quantities of scale with in-house devs, operators, etc., which gives them a built in advantage.
Edit: nevermind, I see now that they are in fact YC-backed. Don't think I've ever seen YC back another "fund"
Re: Launch HN: Moonshot Brands (YC W21) – We buy and grow e-commerce companies
#15Congrats all! Mind elaborating a bit more on how this is different than selling to some PE bros though? Also, for anyone reading this, if you’re a high income individual or have come into a windfall from RSUs/Stonk/inheritance/coin there’s marketplaces and plenty of access to brokers if you want to buy your own shop. Lot of sellers under $1MM ARR will sell their company at like 2-3x (!) which if you can just maintain…
We are both entrepreneurs ourselves, and have lived through working with PE shops that might gordon gecko style fire everyone and flip. Its not our model, our ideal seller stays and grows within Moonshot, where we can both create more value. That being said there are sellers ready to cash out, and for them we have a platform so we can operate and grow the business.
On your point on brokers, we get our leads a variety of ways, including by building great relationships with brokers.
And your last point for sure the higher the ARR the higher the multiple generally (at extreme someone like Proctor and Gamble trades 20x-40x). What we find from our experience is that there are folks that are asset rich (meaning the company is ebitda positive) but cash poor because all the money goes back into inventory/product launches etc... Moonshot is flexible and can help them take money off the table, and then get upside in the future.
Re: Launch HN: Moonshot Brands (YC W21) – We buy and grow e-commerce companies
#16$160M in funding. Is that a typo?
Probably not, there are huge rounds of funding going into these companies in europe right now, like SellerX, Razor Group, Berlin Brands Group etc (and Thrasio in the US).
Most if them are focused on amazon FBA which I honestly don‘t understand. This generic approach sounds better to me.
Re: Launch HN: Moonshot Brands (YC W21) – We buy and grow e-commerce companies
#17Nice. This reminds me of Tiny - https://www.tinycapital.com
For sure, we are focused on ecommerce brands instead of services/software. I love how they think about partnering with founders. And we share a Canada connection.
Re: Launch HN: Moonshot Brands (YC W21) – We buy and grow e-commerce companies
#18Re: Launch HN: Moonshot Brands (YC W21) – We buy and grow e-commerce companies
#19What are your thoughts on the acquisitions that Aterian ($AETR) has done in the last 6 months?
Are you going to be approaching it via a similar acquisition financing mechanism? Buying at 2-3x SDE for a mix of cash and Moonshot stock issued at 10-20X Earnings?
Re: Launch HN: Moonshot Brands (YC W21) – We buy and grow e-commerce companies
#20Can you say something about what kind of companies you are looking for, how you value companies, etc?
Contrived example: Say a company has $1m, $500k, 100k in sales, gross & profit respectively... is that enough information for a starting point? How do marketing mix, growth, sector and other such factors play in?
Also, since it sounds like you are running these as going concerns, what happens if/when founders and key employees aren't included in the acquisition or move on? Is running companies directly an avenue, and if so, are they still run as independent units?
Lastly, do you dabble in grey areas between outright acquisitions and partial ownership?
Also interested in your terminal destination... but other comments have covered this.