Amsterdam-based Dwarfs, an e-commerce platform that buys and grows e-commerce brands on marketplaces, announced on Tuesday, November 29, that it has raised over €30M in a fresh round of funding. The investment came from new and existing investors, including Harlan Capital Partners, Solid Ventures, and angel investors.
The company says the fresh funds will help it to fund new acquisitions.
This current funding round follows the company’s €30M debt financing in August 2021 to keep up the fast pace of acquisitions.
Capital utilisation
Dwarfs says it will keep an eye on revenue and margin expansion for the existing portfolio of 15 brands and around €40M in sales already purchased. The business built a custom operating platform over the course of the last 15 months using its own internal technology, which has since been integrated with all of its current brands.
This helps the operation and integration of recent acquisitions as well as existing brands. There are around €100M worth of acquisitions in the pipeline, with €10M worth of prospects coming up soon.
Demian Beenakker, CEO and co-founder of Dwarfs, says, “Dwarfs is now very well positioned to take advantage of the acquisition opportunities arising in the current e-commerce market. Market conditions changed throughout the year due to rising energy & commodity prices, inflation, the war in Ukraine and the post-covid return of consumers to physical stores. However, against this backdrop, Dwarfs has managed to successfully weather the storm. Now we find new opportunities arising for well-capitalised aggregators to acquire good brands at low prices. As a first-mover in the Benelux and still the only aggregator that, in addition to Amazon, also focuses on Bol.com, Dwarfs is in a great position to take advantage of this.”
According to Beenakker, the company is well on track with, among other components, its in-house designed tech platform and centralised European infrastructure allowing them to expand brands efficiently and effectively across Europe. “With all this in mind, we are now excited to move quickly on the exciting brands we see in the market targeting niche dominant businesses with an annual net profit of at least €500K,” adds Beenakker.
Beenakker says, “We are very confident that we can continue our growth in the coming years. We see that consumers have been gradually returning to online shopping and we expect online retail growth rates to return to pre-covid levels soon. Furthermore, transport costs are now considerably lower than what we saw earlier this year which is already having a positive impact on our margins.”
Buy and grow ecommerce brands on marketplaces
Dwarfs invests in online stores with revenues ranging from €0.5M to €20M. The company claims to be the first e-commerce scaleup in the Netherlands aiming to acquire and consolidate online stores with rapid growth on the bol.com partner platform (LVB – Logistics via bol.com) and, in some cases, internationally through Amazon (FBA – Fulfillment by Amazon).
Cost increases are frequently linked to the scaling up of manufacturing, buying, shipping, customer service, and marketing, as well as the administrative costs of global expansion and cross-border sales. Dwarfs assist sellers in making their online businesses profitable by quickly scaling up their company operations and increasing their sales.
The company is active in the field of home, garden and kitchen (Garden & Outdoor), tools (Tools & Home Improvement ) and pets (Pet Supplies ). It does not focus on sellers who trade in products that have high return flows (such as fashion and lifestyle) and that are sensitive to maintenance or repair (such as electronics, smart homes and computers).
The Dwarfs management team is made up of Demian Beenakker (founder, CEO), Bar Urlings (founder, Chief Marketing Officer), Marco Coninx (Chief Growth Officer), Didos van Dam (Chief Financial Officer), Michiel van der Meer (Chief Operating Officer) and Tim Stribos (Chief Technology Officer).
The company has 35 employees and some of its online brands include, Coninx, CopaDesign, Mizzo, Stilemo, Cheferone, Espada, Zindoo, Yolora, Strettler, StangVollby, LauraFerini, Homra, Daumonet, Bagfitter, and Snoozle.
