BlackRock Inc. has taken the decisive step of initiating an auction for German startup SellerX, following the deterioration of a substantial loan provided to the Amazon aggregator. This move signals an increasingly aggressive approach as financial pressures mount in the e-commerce sector.
The auction is scheduled for September 17 at a Berlin hotel, as announced in the German financial newspaper Börsen-Zeitung on Friday. In Germany, such auctions are a method creditors use to take control of a company when negotiations between the company, its investors, and lenders reach a deadlock. This often results in the equity held by investors being wiped out.
The auction underscores the growing turmoil among companies known as aggregators—firms that raised billions to acquire and manage brands sold on Amazon.com Inc. during the e-commerce boom. However, as the surge in online shopping from the pandemic era subsides, many of these aggregators find themselves struggling with unsustainable debt levels.
GLAS, a debt administration services provider, is managing the auction. Corporate records list GLAS as the security agent for SellerX’s loan facility, which was extended by BlackRock and Victory Park Capital.
Representatives from BlackRock, Victory Park Capital, and L Catterton—the private equity firm that backed SellerX—declined to comment on the situation. SellerX also did not respond to requests for comment. The loan in question, originally a $400 million facility granted in 2021 and increased in 2022 when SellerX acquired fellow aggregator Elevate Brands, has since been moved by BlackRock to nonaccrual status, indicating that payments have stopped.
During a recent earnings call, BlackRock acknowledged the challenges, stating that it was in discussions with SellerX’s stakeholders to explore potential recovery paths. SellerX, once valued at $1 billion, was among the many startups that aimed to become dominant players in the digital consumer goods market. However, as the growth in online sales slowed post-pandemic, these companies faced significant financial strain, leading to a wave of consolidations and financial restructuring.
L Catterton, the private equity arm of Bernard Arnault, the world’s second richest man, invested in several of these aggregators. Meanwhile, BlackRock and Victory Park Capital provided substantial loans across the sector, often finding themselves in complex negotiations over the future of these distressed firms.
Victory Park Capital, which in 2021 secured a commitment of up to $500 million in senior secured credit facilities from Apollo Global Management Inc., is itself undergoing a significant transition as it is being acquired by Janus Henderson Group Plc. This acquisition, announced earlier this month, is expected to be finalized later this year.
SellerX, founded in 2020, successfully raised over $750 million in debt and equity during its early growth phase. However, the company’s co-founders, who served as co-CEOs, have recently announced their departure, as reported by Sifted, a publication focusing on European startups.
