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Accel Club looks to acquire $350M Amazon businesses in 2022

Sky News Live | Ian King
May 11, 2022

Nick Tuzenko, co-founder & Managing Director at Accel Club, spoke with Ian King on Sky News Live on 3 May 2022. They discussed the Aggregator industry, acquiring Amazon businesses, and Accel Club's outlook on the market and ambitions.

Transcript of the interview, edited for clarity.

What are the businesses you are on the hunt for?

We are looking for the businesses that have already some traction and are selling for $5 to $10 million in annual sales. And we are expanding them and bringing them to the global brands that are selling for 15 and $100 million annual sales.

Are there product categories that you won't touch?

We do like all the categories that consumers are interested in such as pet care products, arts and crafts, home and kitchen. Right now, we are buying businesses worth $350 million in annual sales, and focusing on these categories are definitely good post-Covid.

And which have been the most successful eCommerce brands for you so far on the platform?

It would be our arts and crafts brand, Artistro. They are paints, markers and pens for non-professional artists, with million of customers across the globe in US, Canada and Europe.

So what's in it for the brand owners?

Brand owners stay on with us as advisors and they help us to grow their brands, and they have a two-year payout scheme. So they benefit from the growth of their brands, and also they are more than happy to help us with other brands because they have spent 5 to 10 years in the consumer goods, and they have that expertise in eCommerce.

Typically, would you pay them in cash or would you give them an equity stake in the business?

There are 2 parts. The first one is cash closing. They have around 4X multiple to their earnings, and they also have stake in the future growth of the business for the next two years, which is the second part.

As you said, they're on a two-year earnout period as well. Is that really long enough for an earnout?

With all that is going on with supply chain, inflation, for us, this is a long-term game. In three to five years, we are targeting to become a $10 Billion company.

At the moment, most of your operations are predominantly focused on the United States. You are looking to do more in Europe and Asia, aren't you?

We are mostly buying businesses that are selling in the US already and expanding them to European market. We see that eCommerce is growing in Europe, besides Amazon, other marketplaces like Bol.com for example in the Netherlands, are growing. We are more than happy to bring these successful brands in the US and offer them to European customers.

Is it fair to say that the ecosystem in Europe and Asia is not as mature as it is in the United States, that they've been going at this a bit longer in the US? 

I would say that they are different. In the Us, Amazon has its dominance. People use Amazon to search for products. In Europe, people like DTC. They search for products outside of marketplaces like Amazon and Bol. They search on TikTok, Instagram. This is a lever we can use. In Europe, we are focusing more on building social media presence of the brands, and using direct consumer platforms like Shopify to reach the customers.

Several of your senior colleagues are Russian. Has that put the business under strain at all, given events elsewhere?

There are some colleagues that have Russian background. But we are a global company and we have people working in our team located in different countries and different continents. With eCommerce these days, it is a global play and you need different talents with different backgrounds to build really great value for customers.