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Benitago Group CEO Confirms It’s Not Closed, But Has Fired Some Employees • londonbusinessblog.com

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Benitago Group‘s website stopped working this week this week has set off an alarm bell for some people, those who regularly monitor the comings and goings of active fulfillment-by-Amazon aggregators. They believed this could spell the end of the e-commerce aggregator, which raised $380 million in equity and debt financing last year.

Co-founder Benedict Dohmen confirmed to londonbusinessblog.com via a LinkedIn message that “Benitago (or any related entity) is not ceasing its operations. We have not sold or disposed of any assets.” Although the company made a few acquisitions this year, it shifted its focus to brand incubation and operations, or essentially developing their own brands.

And unfortunately, this decision resulted in the company having to cut staff. A former colleague, who wished to remain anonymous, told me they had only been with the company for about three months before his department was let go. Dohmen confirmed the layoffs.

“Unfortunately, we had to reduce the size of our teams by 14%, mainly in the M&A and talent acquisition departments,” he said. “We underestimated the likelihood and impact of a downward trend in the e-commerce market. As the world has changed and market pressures for probability have increased, we have shifted focus to incubation and operations.”

The company was founded by Benedict Dohmen and Santiago Nestares (Benitago, get it?) when they were at Dartmouth College seven years ago. We profiled the company in March 2021 when it raised $55 million in both equity and debt to fund acquisitions of brands built to sell on Amazon’s marketplace.

Benitago leaning on brand development was more of a return to its roots than anything else, Dohmen said. The company started out as an incubator and operator. It wasn’t until later in 2021, around the time the company raised a whopping amount $325 million in Series A equity and debtthat it was “developing an acquisitive M&A arm,” he added.

Ecommerce aggregators buy brands from marketplaces, such as Amazon and Shopify. As we’ve already reported, this week actually, these types of companies have seen their industry change from very hot two years ago to cool. Some continued to do well, even grabbing the now arbitrary venture capital deal, while others noticed the funding hose drying up.

Dohmen also noted that the shift in strategy to focus on brand incubation and operations “was due to the rising cost of debt.”

The new focus now appears to be paying off for the company. The incubation efforts account for 20% of Benitago’s business and are growing by 88% on a quarterly basis, Dohmen said. Third quarter consolidated sales were 308% higher than last year, and this quarter “was Benitago’s most profitable and most cash-flowing quarter to date,” he added.

The company has since developed five international brands, operates more than 10 brands and has more than 300 new products in the pipeline.

Dohmen doesn’t believe Benitago is done with mergers and acquisitions, but does admit that future acquisitions will be “more focused” and instead of throwing a broad network on Amazon, it will “seek only brands that fit the strategic direction of the company.” our current brands.”

“We regret to be too optimistic and not foresee the downward trend of e-commerce and the rising cost of capital,” Dohmen said. “We take full responsibility and are saddened by the reduction of the team. But we’re excited about the brands and products we have in the pipeline, and we’re excited to come out of this recession much stronger.”

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