Another platform-dependent startup bites the dust
Amazon's own business lines and new policy changes coupled with the recession's impact on consumer spending finished Thrasio. They were primarily dependent on Amazon for identifying good D2C businesses, acquiring them and turning them into profit-making machines.
What's next for Indian D2C aggregators like Mensa?
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Thrasio based startups raised millions on a billion dollar valuation. They have a readymade template on what they aren’t supposed to do next now.
Hard to see what they’ll pivot to now The valuations are already up there, to pivot and build something that fits into the valuation will be incredibly hard
They never owned their customers, always borrowed from the likes of Amazon.
Customer acquisition is the largest cost head for D2C startups (for some 2nd largest after delivery), if consolidation didn't help solve that it makes it tough to build a high repeat business, hence a poor LTV
This is the truth
Should have built own Channels and diversified into overseas markets
A lot of gyanis in this thread it seems who say things with all the benefit of hindsight.
At least the d2c aggregator model is somewhat viable unlike a ton of other models such as b2b e-commerce, fintech, ed tech and what not. The only issue I see is that valuations went up too fast too soon. That leads to lower interest in the next round of fundraising from new investors.
Fintech isn't viable? Since when?
Fintech, besides payment processing which is super low-margin, is essentially providing digital lending services on behalf of banks and NBFCs. Eventually the Fintech becomes an NBFC or a bank with enough scale/resources and reaches a steady state. Tough to grow beyond that point quickly because of a myriad of regulations.
But the founder of Mensa brands was very confident of the business model and were going to turn profitable it seemed 👀
Very tough for any of them to work out
Even for Mensa, the only value adds were for brands they took international.
No real value adds from any of the aggregator models, having a single team that handles your marketing and ops does not add as much efficiency as the cost of raising that capital!
Globalbees is a slight exception. They provide value by completely sorting out logistics costs for the brands they acquire (they own xpressbees). I’ve heard they have done well (at least had heard)
Hey @Wittyfeed are you guys hiring for junior level vcs? I am graduating Feb this year from one of the iims have previous experience in startups too
I believe this was always a risky game. Easy to raise but difficult as a stand-alone entity I believe.
Will Mensa also end up in the same rut?
What will happen to Mensa Brands, now? Why do startups that ride a new wave always fail?