Apollo to save Amazon Aggregator Investment

Apollo Global Management Inc., a prominent player in the world of private equity, is taking strategic steps to rescue an investment it made two years ago in Amazon.com Inc. aggregators, a bet that has faced adversity as the pandemic-induced surge in online sales began to dissipate.

In 2021, Apollo committed to providing up to $500 million in debt to Victory Park Capital, a key investor with stakes in various aggregators. Victory Park, a smaller investment firm, has diligently sought a buyer for one of its investments – an aggregator named Perch. This intricate transaction would involve divesting approximately $400 million in debt. Sources with knowledge of the matter, speaking on the condition of anonymity due to the confidentiality of the negotiations, have disclosed these developments.

Perch, founded by former Wayfair Inc. operations executive Chris Bell, currently ranks as the second-largest aggregator in the United States. It has successfully secured nearly $1 billion in funding from investors including Victory Park, SoftBank Group Corp., and others. Apollo, keenly aware of the risk of facing a substantial write-down on its investment in Perch, potentially amounting to hundreds of millions of dollars, has assumed a more active role in the efforts to find a buyer for the company, particularly as Victory Park’s previous attempts have yielded no success.

Recent developments have seen Victory Park Capital appoint new board members to other Amazon aggregators that they have supported. However, these aggregators perceive this move as a form of pressure tactics, compelling them to acquire a struggling entity that they are reluctant to take on.

The saga surrounding Apollo’s investment in Amazon aggregators underscores the challenges faced by investors in the rapidly evolving e-commerce landscape. The frenetic growth spurred by the pandemic has given way to a more complex and competitive environment, necessitating strategic adaptations and risk mitigation efforts.

As Apollo and Victory Park continue to navigate this intricate landscape, the fate of Perch and the broader dynamics within the Amazon aggregator space remain subjects of keen interest and scrutiny in the world of finance. The outcome of these developments will undoubtedly shape the strategies and decisions of industry leaders as they seek to navigate the ever-changing currents of the investment landscape.