Enabling the Future of E-commerce by Leading Carbon6’s $66M Series A
By Eddie Lee, Partner, and Spencer Henry, Associate
The third-party seller (TPS) model, where individuals and businesses sell their products via popular e-commerce marketplaces, has rapidly gained popularity over the last few years, driven by third-party services such as Amazon’s own Fulfillment by Amazon (“FBA”). Despite Amazon being the largest TPS destination, the native features it provides to sellers remain a secondary focus with many limitations. For that reason, many third-party sellers subscribe to independent software tools to manage and grow their businesses on platforms like Amazon. These include dedicated tools that help optimize and automate marketing, product research, pricing, inventory management, ranking, and more.
With over 2,000 software companies servicing third-party sellers, this fast-growing industry remains highly fragmented. The majority of these tools address a very specific use case that makes it difficult for TPS software to scale on their own. As a result, we’ve seen an emerging trend of venture-backed startups aggregating high-performing TPS tools together, scaling a portfolio of software businesses through streamlined operations and shared resources.
Through our partnership with Una Brands, we became intimate with not only the TPS model but also with what it takes to successfully execute a rollup strategy in the e-commerce industry. This powerful model optimizes for both high growth and profitability by combining M&A, financing, and software growth expertise among seasoned management teams.
The TPS model is becoming an important feature of the overall e-commerce industry as we’ve seen the world of e-commerce gradually consolidate into major platforms like Amazon, Shopify, and Walmart over the past few years. As shown in Figure 1 below, the GMV share of major e-commerce platforms relative to total e-commerce in the US increased from 59% in 2019 to 81% in 2021. Amazon alone is nearing 60% of all e-commerce transactions.
Figure 1 — Major platforms % share of US e-commerce spend over time
We believe that companies offering leading tools and educational resources for third-party sellers are not only serving an under-met demand in today’s fast-growing TPS segment, but also driving the continued evolution of e-commerce itself as more goods, buyers, and sellers come together on mega-platforms that already reach billions of people across the world.
We are pleased to announce our investment in Carbon6, leading their $66m Series A financing round in a combined equity and debt investment. Carbon6 acquires and grows software tools used by third-party e-commerce sellers. The company’s growing portfolio services the multi-faceted needs of any type of third-party seller, enabling Carbon6 to deliver a consistent, high-quality experience that cannot be matched by a single TPS software company alone. Carbon6 aims to continue acquiring category-leading TPS software tools to further build out its platform and become the end-to-end platform for all third-party sellers.
Carbon6’s vision to become the destination software platform for third-party sellers is driven by an exceptional team with deep entrepreneurial roots. Justin Cobb, CEO, is a serial founder who spent two decades building companies and scaling high-performance sales organizations across the world. Kazi Ahmed, Chief Product Officer, brings incredible expertise in rollup strategies with years of experience consolidating mental health clinics. Naseem Saloojee, Chief Revenue Officer, is a phenomenal growth leader who was previously SVP of Sales at TopHat, a leading online education platform. The thread tying the stories of the three co-founders is one of relentless entrepreneurship. Justin, Kazi, and Naseem share deep empathy for founders as repeat founders themselves. The Carbon6 team is building a company to be the closest ally of third-party sellers throughout their entire e-commerce journeys.
We’re incredibly fortunate to partner with such an impressive team and couldn’t be more excited to welcome Carbon6 into the White Star Capital family as they unlock the future of e-commerce.
