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Victory Park Capital Closes Multi-year Credit Facility with Cap Hill Brands

February 04, 2021, 07:30 AM
Filed Under: e-Commerce

Victory Park Capital closed a multi-year credit facility with Cap Hill Brands, a technology-driven consumer goods platform that acquires and operates e-commerce brands with an initial focus on Amazon-first brands. The credit facility marks the third deal that VPC has closed in the e-commerce sector since Q3 of last year, having most recently closed a credit facility with Perch, which also acquires and operates Amazon third-party sellers.

Cap Hill Brands was founded in July 2020 by Kevin Saliba and Jason LeeKeenan, two former Zulily executives who helped grow the business into one of the largest and fastest-growing e-commerce retailers with nearly 6 million active customers. The credit facility from VPC will fund new acquisitions of e-commerce brands that exhibit strong growth and have an established track record.

“We’re incredibly grateful to partner with VPC given their deep understanding of the industry and breadth of the market opportunity,” said Kevin Saliba, co-founder and co-CEO of Cap Hill. “This comes at a time when Amazon third-party sellers and digitally native brands more broadly are in need of capital and operational expertise to help grow and scale their businesses, especially given the e-commerce boom throughout the COVID-19 pandemic.”

“We could not be more excited to have value-add investors who believe in Cap Hill Brands’ mission,” added Jason LeeKeenan, co-founder and co-CEO of Cap Hill. “VPC’s investment will support our commitment to providing liquidity to brand owners who have lacked access to capital up until now.”

“We are proud to partner with Cap Hill Brands, particularly co-founders Kevin and Jason, who have significant experience with consumer brands and e-commerce platforms and have already generated substantial momentum,” said Tom Welch, partner at VPC. “Cap Hill Brands joins a number of companies that are working to consolidate the fragmented third-party seller ecosystem and support small e-commerce businesses, and we look forward to seeing the company’s competitive differentiation play out in the market.”

In October 2020, VPC provided a similar financing solution and partnered with Perch, a technology-enabled consumer products company that acquires and operates Amazon FBA businesses at scale. “Partnering with VPC has allowed us to completely focus on growing our business,” said Chris Bell, founder and CEO of Perch. “It is important to us that we work with investors who share our vision and are able to scale with us over time, and we are proud to have found that in VPC.”

Victory Park Capital’s Outlook on the E-Commerce Small and Medium-Sized Enterprises (eSME) Sector

Digital marketplaces are growing at a rapid pace and are accelerating their market share gains over traditional brick-and-mortal retail. By providing better overall shopping experiences, quick door-step delivery options and greater selection of inventory, e-commerce has reshaped retail marketplaces and entrenched itself into consumer preferences. Increased internet saturation, social media tools to identify customers and the introduction of new payment technologies, including buy-now-pay-later financing solutions, have further accelerated the shift towards digital marketplaces.

The Amazon third-party seller ecosystem is an attractive area for investment given its expansive ecosystem. According to Marketplace Pulse, there are 1.6 million active third-party sellers transacting across eighteen global marketplaces, generating north of $295 billion of Gross Merchandise Value annually. The global network of third-party sellers is both robust and highly fragmented, with 280,000 merchants generating annual sales over $100,000. The marketplace continues to expand at a rapid pace, with over 1.2 million active third-party sellers joining one of the eighteen Amazon platforms worldwide in 2019.

“This ecosystem has become increasingly complex for eSMEs to manage growth, leading to many brand owners having considerable personal wealth tied up in one asset with no clear options for financing or an ultimate liquidity event,” added Don Richman, principal at VPC. “VPC is positioned as a value-add partner to the ecosystem through deep domain expertise, coupled with solution-oriented financing structures.”

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