Discover how Mensa Brands is revolutionizing the e-commerce space with their unique ‘House of Brands’ model.

27 Jun 2022 | Business & Strategy

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Hooshang Bakht

Brego Business was started with a mission to make entrepreneurship easy. Our goal is to help business owners grow and scale without having to deal with the day-to-day stress of running a business. We specialize in providing services that help business owners grow their businesses, including search engine marketing (SEM), social media marketing (SMM), LinkedIn marketing, video production, accounts receivable (AR), accounts payable (AP), internal audit, VCFO, and recruitment. We have helped more than 500 brands grow their businesses. We work closely with the clients to understand their unique needs and develop customized strategies that deliver measurable results.

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Mensa brand’s business model has become the fastest Indian startup to become a Unicorn. Ex Myntra CEO and Midlife cofounder, Anantha Narayanan, founded the brand in 2021, and it soon became the talk of the town when he managed to raise funding amounting to USD 135 million, which set its valuation at over a billion USD within its first 6 months. 

Mena is bringing online brands and local companies from the fashion, beauty, and personal care industry together to create a ‘house of brands. The Bengaluru-based company has built global digital-first brands by hand-picking the right entrepreneurs and investing in their businesses. Mensa incorporates brands to scale by utilising its expertise in e-commerce, IT, inventory management, advertisement and marketing, and supply & demand chain flow. It drives D2C sales of businesses and makes them global brands. 

What’s so special about Mensa Brands?

Mensa Brands business model, which is similar to Thrasio’s model, focuses on acquiring established businesses in the fashion, beauty, and personal care segments. The company uses the ‘RxRxR’ strategy (reviews, rating, and rank) to identify profitable businesses, which it then helps to scale up their operations. Currently, Mensa Brands owns 12 brands, and around 80% of its business is run by women. The venture generates 30% of its revenue from overseas markets.

Mensa Brands purchases a majority stake in each brand, with the intention of fully acquiring them within five years. The company’s founding team unites with the brands to run operations at a larger scale, while Mensa Brands assists in managing and extending their offerings on official e-platforms and all leading marketplaces. Mensa Brands business model emphasizes tech-led product development, determining products that prospective customers seek, and introducing a new product range accordingly.

At Brego Business Digital Marketing Services, we recognize the importance of understanding the Mensa Brands business model in developing effective marketing strategies. We offer comprehensive digital marketing services, including content marketing, search engine optimization, social media marketing, and email marketing, to help e-commerce businesses, including those in the fashion, beauty, and personal care segments, increase their visibility and reach their target audience.

Our team of experienced professionals also provides business consulting services to help businesses optimize their operations, increase efficiency, and achieve long-term financial sustainability, all in line with the Mensa Brands business model. Contact us today to learn more about our services and how we can help you achieve your business goals in the rapidly evolving digital landscape.

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What is the Thrasio model?

Established by Joshua Silberstein and Carlos Cashman in 2018, Thrasio deals with brands that sell its products on Amazon. The company merges with the businesses or acquires them to scale. Generally, they deal with brands allied with day-to-day products. After the acquisition, Thrasio enhances the acquired company’s inventory management, marketing strategies, product development and supply chain management. 

With this business model, Thrasio has earned revenue of around $500 million and a profit of $100 million in 2020. In February 2021, Bloomberg reported the company to have a value of more than $ 3 billion. 

Differences and similarities between Thrasio’s model and Mensa’s model

Mensa Brands is largely inspired by the Thrasio business model and has adapted the Thrasio business model for its success and to attract investors. Similar to the Thrasio business model, Mensa identifies small businesses with a digital-first approach, having reputable founders, a base of loyal customers, and a revenue generation of $1-$10 million per annum. It acquired a few rapidly-growing brands and started working on their portfolios. Then, the company utilised the Thrasio business model’s marketing strategies, IT structures, inventory management, and industry knowledge to optimise the growth and development of the brands it acquired.

The company leveraged its robust digital marketing competencies, inspired by the Thrasio business model, for effective brand story creation, creative copywriting, and world-class photography to give brands a push to scale. While the Thrasio business model offered a 100% exit to the founders of the businesses, Mensa Brands purchased stakes in the brand and aimed to fully acquire them in the next five years, similar to the Thrasio business model. Once the brand is all set to work with a larger and more technically equipped team, Mensa employs its expertise, inspired by the Thrasio business model, in digital marketing and supply chain expansion to boost the acquired business

Acquisition opportunities through the Mensa Brands Model 

There are numerous startups that are inspired by the Thrasio model, and these startups have managed to raise funds from equity and debt investors. The goal of this model is to identify brand development potential, acquire the brand at the proper pricing, and then drive growth through a mix of greater sales and lower expenses.

With throat-cutting competition, a house of brands needs to be quick to act in order to close the acquisition before the competition increases the brand’s valuation. India is quite different from the USA as a market, and its comprehensive e-commerce economy is still incomparable. Moreover, Indian offline retailing is still dominating the market even after the pandemic. 

Though the Indian e-commerce industry is behind the e-commerce markets of the USA, UK and China, it has excellent future opportunities to utilise economies of scale and employ the proper expertise to develop acquired brands. Mensa Brands’ model can open up the door to new opportunities for potential e-commerce growth

The evolution of the Indian eCommerce market

The competition in the Indian e-commerce industry is increasing every day, and its success will depend on the acquisition of quality founders, effective fundraising, and expertise to scale a brand efficiently. With respect to the business dynamics of the Indian market, e-commerce experts are expecting the evolution of the Thrasio model. Following this model, companies may acquire direct-to-customer businesses or offline businesses that seem promising in the market. These businesses will be those that have excellent customer affinity and an enhanced customer experience, with an optimistic development forecast. In the future, we can anticipate the rise of numerous mergers and houses of brands that acquire different brands and permit them to operate under the banner of a company. 

Are there more Mensa’s to come?

Taking inspiration from the Mensa business model, Mensa has assisted different brands in organizing and optimizing their products across all leading markets. The Mensa business model has executed “tech-led marketing” and optimized product prices to drive demand. Mensa, using their business model, has performed tech-led product development, such as identifying the things people want and assisting brands to launch new product ranges accordingly. Though there are significant differences between the Indian e-commerce market and European e-commerce markets, the Mensa business model is quite inspiring for companies that are ready to be a part of a house of brands.

While a growing number of competitors are joining the e-commerce rollup industry, Indian brands have gotten a head start by adopting the Mensa business model. Thrasio-style business models provide critical marketing, cost-cutting, and technology know-how to drive the growth of acquired businesses. This is an exciting period for the Indian ecommerce sector, as players are copying the Mensa business model while making their own changes to align it with India’s economy. Investors are looking for prospects with high growth potential, and they are now driving an increase in Mensa business model-based roll-up firms.

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Frequently asked questions

What is Mensa Brands, and what do they do?

Mensa Brands is an e-commerce company that acquires and operates high-growth, profitable consumer brands across various categories, including home goods, health and wellness, beauty, and more.

What is the Mensa business model, and how does it differ from other e-commerce companies?

Mensa Brands' business model is focused on acquiring and scaling established consumer brands, rather than building new brands from scratch. This allows Mensa to leverage the existing brand recognition and customer base of these brands to drive growth and profitability.

How does Mensa Brands identify potential acquisition targets?

Mensa Brands has a team of experienced e-commerce and consumer goods professionals who use a data-driven approach to identify potential acquisition targets. They look for brands that have a proven track record of success, strong customer engagement, and untapped potential for growth.

What is Thrasio, and how is it related to Mensa Brands?

Thrasio is a similar e-commerce company that acquires and operates third-party Amazon FBA (Fulfillment by Amazon) businesses. Mensa Brands was founded by former Thrasio executives and is based on a similar business model, although Mensa Brands focuses on acquiring brands across multiple channels, not just Amazon.

How does Mensa Brands finance their acquisitions?

Mensa Brands has raised significant funding from institutional investors, including venture capital firms and private equity funds. They also have a revolving credit facility to finance acquisitions.

What happens to the existing management teams of the brands that Mensa Brands acquires?

Mensa Brands typically retains the existing management teams of the brands it acquires. This allows for continuity in brand management and ensures that the team that built the brand can continue to drive its growth under Mensa's ownership.

How does Mensa Brands help the brands it acquires grow?

Mensa Brands provides operational and financial support to the brands it acquires, including access to best practices in areas like supply chain management, marketing, and e-commerce optimization. They also invest in new product development and expanding the brands' distribution channels.

What types of consumer brands does Mensa Brands acquire?

Mensa Brands acquires brands across a wide range of consumer categories, including home goods, health and wellness, beauty, and more. They focus on brands that have a strong customer base and untapped potential for growth.

How has Mensa Brands performed since its founding?

Mensa Brands has grown rapidly since its founding, acquiring dozens of brands and achieving profitability within its first year of operation. The company has raised over $1 billion in funding and has been valued at over $2 billion.

What are the long-term goals of Mensa Brands?

Mensa Brands aims to become the leading operator of consumer brands across multiple channels, not just Amazon. They plan to continue acquiring successful brands and providing operational and financial support to drive their growth and profitability.

Mensa Brands' business model revolves around the acquisition and growth of profitable e-commerce brands through streamlined operations and brand expansion. To achieve this, Mensa Brands invests in marketing, product development, and customer acquisition while leveraging its portfolio of brands to cross-sell products and increase revenue.

At Brego Business Digital Marketing Services, we understand the importance of brand building and marketing in the success of the Mensa Brands business model. Our comprehensive digital marketing services, including content marketing, search engine optimization, social media marketing, and email marketing, can help Mensa Brands and other e-commerce businesses increase their brand visibility, reach their target audience, and drive sales.

With our team of experienced professionals and business consulting services, we can help e-commerce businesses optimize their operations, increase efficiency, and achieve long-term financial sustainability, all in line with the Mensa Brands business model. If you're an e-commerce business owner looking to scale and grow your business, contact us today to learn more about how we can help you achieve your business goals in the rapidly evolving digital landscape.

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