Una Brands to splash $100m on Australian e-commerce acquisitions

E-commerce aggregator Una Brands is on the hunt for more Australian companies after bringing 30 brands into the portfolio since the startup's launch in March 2021, including the recent seven-figure purchase of recyclable and unbreakable drinkware business Bellaforte from Gold Coast teenager Sam Richards. 

The Singapore-headquartered company, co-founded by Sydney-based Adrian Johnston, has announced its intentions to invest $100 million in Australian online retailers over the next two years.

"Australia was our launch country and has been a hugely successful market for us. This investment of $100 million means that we can double down on our investments and help Australian brands go global and achieve their full potential," Johnston says.

He tells Business News Australia that the funding will come from a mix of debt and equity investors. The group has now been through four funding rounds to secure US$55 million ($73 million) from backers such as Alpha JWC, White Star Capital, Presight Capital and Global Founders Capital and is planning another capital raise this year.

Johnston says Una requires a minimum revenue of $1 million for any business it acquires, a net profit margin greater than 20 per cent, and at least 80 per cent of revenue coming from online channels.

"We also look for businesses that are in our categories – home and living, kitchen, pets, baby, outdoor and sports. Those are the main categories," he says.

"The beauty of this business model is it scales very well, both from a cost perspective and a revenue perspective. From a cost perspective we're able to get massive synergies across freight and logistics, procurement, supply chain and inventory management, and customer service – you get real scale benefits there.

"On the revenue side, we're able to optimise across the portfolio so if something is working really well in one brand or there’s a particular customer base that’s working really well, we’re able to take that learning across other brands and also cross-sell."

He says Perth-based period care business JuJu, founded by Brenda Tootell and acquired by Una Brands in August 2021, is a good example of a success story that has since grown both here in Australia and abroad.

"If you take the Juju business for example, we’ve recently expanded that onto Amazon so that business is now selling on Amazon in the USA with a strong uplift in revenue from that," Johnston explains.

"We bought a clock company in Melbourne - and likewise with that one we’re now getting something like 80 per cent of the revenue outside Australia.

"One business that we just closed last week is a business called Hendeer.com – that was a seven-figure deal. They make these beautiful rugs, it's a purely D2C (direct-to-consumer) business based here in Australia and the seller’s based in Penrith in Sydney. We're really excited about the brand."

Johnston estimates that there are more than 2,000 independent e-commerce brands with an annual revenue of more than $1 million in Australia, while globally the space has seen USD$13 billion ($17 billion) raised by investors to buy and merge e-commerce businesses, predominantly in the USA and Europe.

After analysing data from more than 40,000 Australian sellers on Shopify and Amazon, Una Brands found that home, kitchen, personal care and beauty businesses make up the majority of Australia’s e-commerce sector.

The entrepreneur says the company - also co-founded by Kiren Tanna, Kushal Patel, Tobias Heusch and Srinivasan Shridharan - is on a mission to shape the future of e-commerce by acquiring great brands and growing them into global, well-loved and enduring household names.

"We acquire 100 per cent of the brand and partner with the seller to turbo charge growth into other regions and channels as well as optimise PPC (pay per click), marketing and operations," he says.

"We offer e-commerce founders an attractive exit opportunity that allows them to still be involved in the brand and become part of our Una family."

In addition to Australia, Una Brands also has offices in Singapore, India, China, Malaysia and Taiwan. Part of its strategy is to take Australian companies to overseas markets and vice versa.

"We bought a business in Singapore called ErgoTune, which is an ergonomic chair company and we expanded that company to Australia in December of last year, and already 25 per cent of the revenue of that company is now generated in Australia," he says.

"It’s a similar story with a company called Heaven Lux, which is a luxury bedsheets company – we expanded that business into Australia after acquisition and the sales here have done really well."

When asked about recent trends in e-commerce demand, Johnston is optimistic about broader trends even though people are returning to physical stores.

"There was definitely a big COVID bump where people were spending more online because they weren't able to go to the shops. And there has been a bit of a pullback, particularly in the sort of home and living categories that we specialise in, just because people are now able to go out into the shops," he says.

"In terms of the cost of living, that’s not a big factor that we’re seeing at the moment. Largely Australia has managed to avoid a big sort of economic downturn, and so spending in retail broadly across high street and online remains pretty strong."