Hey, thanks for tuning in to another Partner Interview at EcomBalance. At EcomBalance, we’re all about creating win-win partnerships where we are able to grow with other companies in the eCommerce space.
In this exclusive interview, we interview Tomás España from YABA, a brand aggregator company based in United States which mainly caters to the European market.
Tomás España is the head of YABA. Tomas has a bachelor’s degree in marketing and advertising. He has been working for big tech companies like Qualtrics, Criteo, and consultancy agencies like Interband or Rocket Digital for the last 6 years around the US, Argentina, Ireland, and Spain. He is also a proactive private investor in the startup ecosystem. Tomas joined YABA in March 2021 to lead the origination area and define the sales/origination process. He is in charge of deal sourcing at YABA, managing the deal origination team in South Europe. His main goal is to identify investment opportunities in the core markets: Spain, Italy, France, and opportunistically eastern Europe to ensure a large volume of deals are sourced and executed.
We hope that you enjoy the interview and that it brings value to you as an eCommerce business owner.
Connor: Hey Tomás, thanks for taking the time to chat with us here. We love getting to know our partners better so that our community can benefit from what our partners are offering and doing in the industry. To get started, can you give us a high-level overview of YABA and how it got started?
Tomás: Hey guys, thanks for having us! Yaba was started at the end of 2020 when we saw an opportunity to bring the Amazon aggregator model to Southern Europe. At the time the ecosystem was shaking and many Aggregators were getting started. However, nobody was targeting southern European countries. Historically, Spain, Italy, and France have been tough markets to enter because of the strong cultural barriers they have. Spanish, Italian, and French typically prefer to work closely with people they are familiar with and especially when thinking about selling their own company, they want to make sure they understand everything that is discussed and they feel more comfortable in doing so in their native language.
With this idea in mind, we started building local teams to make the exit process as easy as possible and provide proximity to these sellers. We didn’t raise a lot of capital because we wanted to demonstrate that we were able to acquire companies in relatively quick times and most importantly operate them. Our thesis was proven successful, and we were able to get onboard 3 southern European companies during our first months of operations. Once we did that, we were confident enough that we could run this model and be successful also in other markets. Through 2021 we kept developing and acquiring Southern European companies and we closed the year with 12 brands in our portfolio. With these achievements we went out to raise our first Serie A financing round where we got $85 million. This capital has been key for us to keep investing in the brands we have in our portfolio as well as acquiring new ones.
Connor: That’s awesome! Can you dive a bit more into the services that you offer to help nurture and grow brands? I’m sure our audience would love to know exactly what problems you could solve for them.
Tomás: We at Yaba are top-notch operators. Almost 90% of our entire team is focused on operating Amazon brands. We have A players ranging anywhere from supply chain specialists to Amazon brand managers.
From the first meeting with the entrepreneur we start to get a sense in which way Yaba could help grow the brand. We run detailed preliminary commercial and financial analysis to make sure that if we acquire a company we will be able to make it grow. We have identified over 150+ growth levers that we check for each of the opportunities we analyze.
Connor: Jumping off of that…if there was one problem you’d say that YABA solves best for your clients, what would it be? Why?
Tomás: Thanks to our initial focus on southern European brands and being our team formerly from Europe we are now strategically positioned to bring US brands into Europe. Amazon sellers are very good at creating and growing Amazon brands within certain markets; for instance the US, but when it comes to expanding it internationally it becomes harder because you now require many more resources than before. Especially when it comes to operating in Europe there are multiple factors that come into play; first of all each country has its own regulation, so you have to register the VATs for each country and this can be very time consuming and stressful for a first timer. Once you are done with it, you now need to adapt all contents of each of the products you sell for each country you are selling in (Germany, France, Italy, Spain).
This again can be very time consuming. Once you are up and running, in order to rank and scale in the market you need to prepare a sharpen PPC campaign and to do that, you must have a deep knowledge of the language as well as of the culture; understand the phrasal verbs, and daily words customers search for (which can be very different than what a simple translator give you). In essence, what Yaba brings is speed and guarantee. By having brought multiple brands from the US into Europe we now have the experience to reiterate the process and implement it very fast to any new brand while ensuring a smooth process thanks to our local team of top-notch operators.
Connor: As the company continues to grow over the next year, what are your plans for expansion? Any new products or offerings or enhancements to your current products?
Tomás: Our plan for 2023 is to continue expanding in the US market and integrate more bestseller brands that can generate synergies with our portfolio.
Connor: And how specifically would you say that Yaba and your team is different from other similar businesses in the industry?
Tomás: Since day one, our approach has been searching for “product lovers”. This is about people who take simple ideas, but by being truly passionate about what they do and really caring about the products they deliver, they are able to create great products that differentiate them from everybody else and consequently, they are able to create powerful brands. We take this approach because there are millions of products listed on Amazon but we are confident that over the long run this approach will continue to pay off. We are aiming to build a House of Sustainable Brands that will continue to be there ten, twenty, fifty years from now!
Connor: What made you decide to get involved in the ecommerce Aggregator business space? What’s your starting eCommerce story? From what we’ve found, a lot of business owners in the space have fun stories of how they first started…
Tomás: The 5 co-founders had previous experience in other digital ventures, Alejandro at Mr Noow (Take-away App for restaurantes), Sergi and David created Ulabox (online supermarket) Ruben (co-founded the marketing agency VIKO) and Patxi as CFO of Kiwoko (a digital and offline pet retailer). We saw the successful business model of Thrasio in the US and decided to build something similar in Europe. Once we were active in Europe we realized that we could also be a great partner for US brands looking to expand into Europe as we have all the infrastructure built. So here we are, leveraging our experience in other internet ventures in order to maximize the growth pace of YABA’s brands.
Connor: Love it! Talking more about the eCommerce industry, where do you see it going in the next 1-2 years? Any unique predictions that you could share?
Tomás: The last 12 months have been tough for the Ecommerce industry (freight costs exploding, some raw materials too, PPC going up, demand going down from the COVID peak, amazon increasing fees, etc) all these causing margins compression. We expect the next 1 to 2 years to continue to be difficult, specially on the demand side (as everyone is being cautious in consumer spenditure due to the noise of a recession, inflation and high interest rates).
However we are focusing on Amazon and that specific channel is benefiting from people switching from offline to online and also from people looking for the best prices. We believe scale plays an important role here in order to generate synergies (better COGS, 3PL fees, freight costs, ppc knowledge, etc), so we believe aggregators should benefit from their scale during these difficult years for the ecommerce industry. Next years winners should be focused on efficiency and profitability, it is more and more important to protect margins.
Connor: Giving you an open mic for a minute, what is something you’d want the EcomBalance audience to hear?
Tomás: Selling your business should be a unique experience. If you are considering an exit, it means that you put a lot of effort into creating and scaling your business as well as invested a lot of time and money over the past several years. You deserve to find the right partner for the next phase of your business.
We at Yaba, want to know you, and understand in which phase of your project you are in. Each entrepreneur is different from one another and this is why we are flexible with the offers that we present in order to adjust to everybody’s needs.
Connor: Changing gears a little bit…When it comes to bookkeeping and accounting, what do you think the biggest pain points for business owners are? Feel free to speak from personal experience as well.
1. Finding an an appropriate accountant with enough knowledge about e-commerce and amazon, especially with what regards VAT , pan-eu, storage, intra-stat payments etc…this is not an ordinary business that all small business accountants manage on a daily basis.
2. Reconciliating Amazon Sales and Payments with the Amazon Fees Invoices
Connor: As we close this out, I just have one more question. Where is the best place to find and follow you and the company online? Also, if you have one, is there any special offer that you’ll be offering to the community today?
Tomás: Come visit our website and follow us on Linkedin, and Instagram. If you are interested in learning more about an exit opportunity, reach out to us here: [email protected] and we will be happy to hear your story and see if we can become part of it!