Profound Commerce, an acquirer, and operator of e-commerce brands announce the acquisition of FBA Capital Management’s portfolio of e-commerce marketplace brands.
“We are excited to acquire FBA Capital Management’s portfolio of brands, join forces with the FBA Capital Management principals and extend our reach into new categories,” said Matt Howitt, CEO, and founder of Profound Commerce. “We have been buying and growing marketplace brands for more than four years, and our strategy remains simple and effective: do the basics exceedingly well and lay a strong foundation for brand durability. As we have grown through the recent turbulence in e-commerce, our track record has attracted notice from e-commerce entrepreneurs and fellow brand platform operators, like FBA Capital Management. Collectively, the two teams share the belief that the strongest operators and brand builders will win. We believe that there will be many more opportunities to acquire portfolios of brands and even entire aggregators in the future. Profound Commerce intends to facilitate this trend.”
Adam Gerchen, CEO of FBA Capital Management, echoes these sentiments. “From the start, we believed that the combination of scale and best-in-class operations would ultimately determine this ecosystem’s winners. Successful growth and execution require global coordination, creativity, tenacity, and an incredible degree of organization. Profound Commerce and FBA Capital Management share these core principles, and we believe that the brands and teams will create value and synergies as a combined platform. We look forward to partnering with Matt Howitt and his team to take these brands to new heights.”
With this acquisition, Profound Commerce continues the recent wave of consolidation in the aggregator and brand-holding company space. This acquisition doubles Profound Commerce’s topline revenue and contribution margin and brings significant operating leverage to the Profound Commerce portfolio.
“Since our investment in 2021, Profound Commerce has proven its expertise in acquiring and managing marketplace native brands,” said Matthew Spiro, Managing Director of Atalaya Capital Management LP, Profound Commerce’s first and largest institutional investor, and a Profound Commerce board member. “We are very excited about what Matt Howitt and his team are building. This transaction represents a significant leap forward for Profound Commerce both in terms of scale and in introducing a top new investment partner into the business. FBA Capital Management has significant deal and capital markets experience, as well as strong relationships across the industry, which Profound Commerce can leverage.”
Under the terms of this transaction, FBA Capital Management will obtain a minority stake in Profound Commerce. Brian Gutman, COO of FBA Capital Management, will join the Profound Commerce board of directors. Brian Gutman and Foley Schmidt, FBA Capital Management partners, will join the Profound Commerce leadership team.
Jones & Spross, PLLC acted as legal counsel to Profound Commerce. Levenfeld Pearlstein, PLLC acted as legal counsel to FBA Capital Management. Smith, Gambrell & Russell, LLP acted as legal counsel to Atalaya Capital Management LP.