An e-commerce brand aggregator based here has started operating with US$36 million (S$48.1 million) in seed financing to buy and grow Asia-based brands that sell on Amazon.

The funding round for Rainforest, as the entity is known, comprised US$6.5 million in equity financing led by Nordstar, with participation from Insignia Ventures Partners.

A US$30 million committed debt facility was raised from a United States-based debt fund.

Brand aggregators such as Rainforest devote much of their revenue to building up brands that have consumer appeal.

Rainforest chief executive JJ Chai said the debt covenants include the requirement to acquire profitable brands with sufficient track records.

Mr Chai formerly led growth and strategy for Carousell and was Airbnb's former South-east Asia managing director.

Nordstar managing partner Ole Ruch said: "We have had the privilege of knowing JJ Chai for a long time, having worked closely with him when he was at Airbnb."

Rainforest chief financial officer Jason Tan held the same post at fintech companies Fave and Ovo, while chief technology officer Per-Ola Rost is an Amazon software entrepreneur and a seven-figure Amazon FBA (Fulfilment by Amazon) seller, said the brand aggregator.

Rainforest, founded last year, has fully acquired three brands to date - two in the home/beddings category for about US$1.1 million from a Singaporean entrepreneur. The third brand is in the personal health category and cost about US$800,000.

The initial acquisitions were financed from the start-up's balance sheet, but will be refinanced with debt. Subsequent acquisitions will be mostly financed via debt.

"At the moment, we are focused on brands that sell predominantly on Amazon and have a strong brand position on the Amazon platform in lifestyle categories (home, pets, personal care)," Mr Chai said.

"We don't do highly seasonal, fast-evolving product categories like fashion and electronics."

Deals are evaluated based on strategic value to the portfolio, taking into account opportunities for further growth, including geographical expansion, margin improvement and widening of the product assortment.

Mr Chai added: "Eventually, we hope to be a digitally native house of brands. A cross between Newell Brands (parent company of brands like Rubbermaid, Paper Mate, Yankee Candle) and The Hut Group (a Britain-based listed company that houses a selection of lifestyle brands selling mainly online)."

THE BUSINESS TIMES