factory14 raises $200M Seed funding to acquire and scale the most recognizable consumer brands of tomorrow. The company announces the acquisition of Pro Bike Tool
May 20, 2021
With one of the largest ever Seed rounds in Europe, factory14 sets out to build the next generation of champion brands like Anker Innovations
LUXEMBOURG, May 20, 2021 – Factory 14 S.à r.l. (“factory14”), a platform dedicated to acquiring, financing and scaling digital consumer brands, has emerged from stealth mode with $200M of capital. The Seed equity round was co-led by dmg ventures and DN Capital, with other investors including VentureFriends and a handful of experienced tech executives. Victory Park Capital provided the credit facility and also participated in the equity consortium. factory14 partners with the world’s best digitally native brands and provides them with technology, capital and know-how to become category champions.
The generational shift in consumer purchasing habits shifting towards digital retail channels has been further accelerated by Covid-19. Some estimates place the number of marketplace sellers on Amazon alone at over one and a half million with gross merchandise volume of $300B, with more than two thousand new sellers joining each day and forecasted annual growth of over 30% through the end of the decade. Platforms such as Shopify and WooCommerce have also seen significant traction, offering sellers an easy way to set up an online store and establish a direct connection with their customers.
The company’s strategy focuses on the need to have a more streamlined portfolio of omni-channel brands which have already established significant brand equity. According to Guilherme Steinbruch, co-founder and CEO, factory14 “partners with a smaller number of high-quality brands that have the potential to own their categories. We focus on quality over quantity. Our target is to acquire and scale the next 5 to 10 Ankers.”
factory14 is also announcing the acquisition of UK-based Pro Bike Tool, a juggernaut in the cycling category on Amazon. “Pro Bike Tool is exactly the type of brand we plan to partner with and grow: a market leader with premium positioning in a category where we continue to see significant tailwinds” said Steinbruch. “We are huge admirers of what Chris and Nicole have built and are honored that they have selected factory14 to carry on their legacy.”
The growth strategy for category champions such as Pro Bike Tool is centered around international and multichannel expansion, product development and using them as platforms for category-wide consolidation. Pro Bike Tool is the first such platform and “there are already more than 50 cycling add-on opportunities mapped out.” factory14 also acquires smaller brands when the data indicates that there is significant potential to grow them into winners. “These brands undergo a two-year acceleration program with pre-defined steps after which the top performers are given the same resources to grow as our category champions” stated Steinbruch.
Despite having been launched a few months ago by Steinbruch and co-founders Marcos Ramírez (COO) and Gianluca Cocco (CBO), factory14 has already acquired four brands, is profitable and expects to cross $20M in trailing twelve months EBITDA by the end of 2021. The founding team also included Carlos Abascal (CFO) and Rahul Thakrar (VP of Expansion) and has expanded to 40 people representing more than 15 nationalities across offices in Luxembourg, Madrid, London, Shanghai and Taipei. “We are building the business focusing on creating long-term value and not on short-term gains. As such, we have worked hard to attract the best talent and build a stellar team across geographies which is expected to grow to over 80 people by the end of the year.”
“E-commerce is undergoing structural changes which are enabling thousands of exciting new brands to be born every day” said Manuel Lopo de Carvalho, CEO at dmg ventures, adding that “factory14 can provide these brands with the tools, capital and expertise that enable them to play in the big leagues.”
Ian Marsh, Principal at DN Capital, stated, “We had discussions with most aggregators and were immediately impressed by factory14’s differentiated vision focused on strong consumer brands and the world-class team they have put together with top tier private equity investors combined with seasoned e-commerce executive and former Amazonians. We are excited to work with Guilherme, Marcos, Gianluca and the rest of the factory14 team to create brands that inspire consumers around the world.”
“factory14 offers significant support for businesses looking to scale in the global digital marketplace and is well-positioned for future growth,” said Tom Welch, Partner at VPC. “We are pleased to partner with factory14 as the company identifies new acquisition targets, scales its platform and hires top talent to support its portfolio.”
factory14 finances, acquires and grows the world’s best digital brands. The company is on a mission to craft the most recognizable brands of the 21st century by partnering with outstanding brands and providing them the capital and tools to become category champions. factory14 operates brands such as Pro Bike Tool, the leading seller of premium cycling tools and accessories on Amazon.
About Victory Park Capital
Victory Park Capital is a global alternative investment firm that provides capital to emerging and established businesses in the U.S. and abroad. The firm’s differentiated offerings leverage an extensive network of industry relationships, disciplined deal origination, creative financing capabilities, broad credit structuring and special situations expertise. The firm was founded in 2007 and is headquartered in Chicago with additional resources in New York, Los Angeles and San Francisco. VPC is privately held and a Registered Investment Advisor with the SEC. For more information, please visit www.victoryparkcapital.com.
About dmg ventures
dmg ventures is a consumer-focused early-stage corporate venture capital firm, offering its media equity and influence to help founders build the next wave of direct-to-consumer businesses. Based in London, dmg ventures focuses on Series A and Series B investments across the consumer sector, and has backed companies including Cazoo, Yopa, Farewill, Bricklane, Zoopla, Wowcher and Cudoni.
About DN Capital
DN Capital is a leading European early-stage venture capital firm with operations in London, Berlin and Silicon Valley. The firm focuses on Seed, Series A and select Series B investments in software, fintech, marketplace, consumer internet and digital health companies. DN Capital’s mission is to support entrepreneurs in creating global category leaders. DN was an early backer in companies such as Shazam, Endeca, Auto1, GoStudent, Jobandtalent, Mister Spex, Hometogo, OLX, Remitly and Quandoo.