By Ryan Gallagher
Since early 2020, online business aggregators have garnered attention from investors and media headlines. Most notably, some Amazon FBA aggregators have now become household names after the digital aggregation market reached USD 14 billion, according to Entrepreneur. Professionals in this industry hypothesize that growing competition between digital businesses will drive a greater need for business aggregation.
While ecommerce aggregators like Thrasio have purchased profitable companies with already-cultivated customers, other forms of aggregation have emerged. Businesses known as “digital demand aggregators” have a slightly different business model, and are putting it to work by acquiring content websites. The most in-demand websites, blogs, and online portals are getting a high number of organic visitors, and aggregators want to step in to further grow and monetize these assets.
In 2021, a startup called TreasureHunter hit this “business roll-up” market. Today, this team is purchasing content websites in many different categories from thought leaders and content creators.
“With TreasureHunter, we want to revolutionize the digital content segment and give small websites and blogs the exact tools, resources, and partners we could have only dreamed of back when we established our first blogs in 2013,” said Benjamin Schardt the Co-Founder & Co-CEO of TreasureHunter who started his entrepreneurial experience with his own blog.
Aggregation’s Current Climate
It’s no secret that ecommerce boomed during the pandemic. Everything under the sun like shopping, learning, communication, and work–all had to be done virtually. During the COVID-19 storm surge, aggregators like Berlin Brands Group and Razor Group acquired ecommerce businesses (oftentimes those that are Amazon sellers).
The success of their business model has kept investors’ money flowing to other aggregators—especially those selling on the Amazon marketplace. For example, 41% of all the US ecommerce sales occurred via Amazon in 2021.
However, one startup known as TreasureHunter has amassed a team who has differentiated themselves from Amazon FBA aggregators by buying up digital equity in other areas online where ecommerce is influenced.
Business Aggregation Goes Virtual
It’s a standard business practice for large corporations to buy-up or “roll-up” smaller entities–it’s been going on for years. However, the “new normal” business climate has produced several large digital business aggregators in a short span of time.
Digital roll-ups “are the aggregation of smaller companies into larger firms, creating a potentially compelling path for equity value,” according to TechCrunch. “…roll-ups often achieve much greater exit multiples, known as ‘multiple arbitrage,’ so it’s no surprise that the trend is making its way online.”
To this point, the leaders at TreasureHunter are in the midst of acquiring content websites that deal in certain niches. Niche content sites may come in the form of a sports blogs or digital recipe website. Very importantly, these content websites have been created by truthful individuals who want to distribute content regarding a hobby that they are passionate about. In the last few years, these content creators have been rewarded by growing advertising revenue and now attention from corporations.
For aggregators like TreasureHunter, their team hopes to acquire these websites and grow them into well-oiled, passive revenue-producing machines. Aggregators will use their larger teams and bigger budgets to uplift output around tasks that individual blog owners currently struggle with. To turn their goals into reality, aggregators must cut operating costs of the blogs they buy, increase advertising revenue, and create more helpful content that satisfies the site’s unique audience.
“We are leveraging the strong collaborations with respect to marketing, advertising, content management, and creating synergies between technology our teams are using to enable massive growth,” continued Schardt. “This is growth that would not be possible for the asset, stand-alone.”
The Future of Digital Asset Aggregation
With investor funding secured, teams like TreasureHunter will get to work onboarding newly-acquired assets. Aggregators, their investors, and their professional teams are betting on the business model to find future success. These companies aim to control “digital property” on the internet, just as Amazon FBA aggregators have gained a large portion of control inside Amazon’s digital bazaar.
In 2019, ecommerce ad spending in the United States reached USD 12.5 billion, according to Statista. In 2021, the total US ecommerce sales reached USD 960.1 billion, which is an 18.3 percent year-over-year increase, according to Oberlo. So, aggregators like TreasureHunter reason that controlling areas of the internet where ecommerce is influenced will be highly profitable as these trends continue.
Given the 32 million (and counting) active content portals with audiences across the US and Europe, aggregators predict competition growth and a greater value for digital assets with loyal audiences. Plus, these corporations bet that ecommerce sales will grow and advertising revenue will be continually spent to stimulate these sales. Aggregators are crunching these numbers, building higher quality sites, and staking out as they expect the internet landscape to undergo a massive evolution in the next five (plus) years.