Rainforest Co-Founder and CTO Per-Ola Röst
Launched in late 2020 by former Carousell, Airbnb, and Amazon executives, Rainforest has swiftly emerged as a disruptive force in the realm of e-commerce brand aggregation. Specialising in categories like parent/juvenile products, home goods, personal care, and pet items, the company leverages its proprietary technology to identify, acquire, and propel small e-commerce businesses to new heights.
The company’s approach places a premium on nurturing entrepreneurs and maintaining brand identities while achieving remarkable growth. With funding rounds and a focus on global expansion, Rainforest wants to build a sustainable and innovative company that resonates with parents worldwide.
In this interview, Rainforest’s Co-Founder and CTO Per-Ola Röst takes us through its journey to become a known name in the e-commerce aggregation space.
Edited excerpts:
Can you provide an overview of Rainforest’s journey so far? What led to the founding of the company and its current position in the e-commerce brand aggregation space?
Rainforest was founded in late 2020 to tap into the Asian ecosystem of e-commerce entrepreneurs.
In years prior, there had been an increase in entrepreneurs developing and marketing products online, further boosted by the onset of COVID-19. Our model was to find and acquire small e-commerce businesses and scale them up with a veteran team of operators.
Over time, we decided to focus on the parent/juvenile space, as we saw solid performance for our brands in this category. We believe in the underlying fundamentals, like the importance of trust/relationship with parents and better synergies across a portfolio of brands in the same category.
Also Read: Rainforest acquires baby care brand NatureBond to grow its portfolio of cross-border brands
Today, we have 15 brands, mostly in our core category. Rainforest is also acquiring globally, although many of our acquisitions are still in Asia.
E-commerce brand aggregation is a unique niche. Could you elaborate on Rainforest’s approach to acquiring and growing consumer e-commerce brands? How does your proprietary technology play a role in this process?
We work with brokers worldwide, but many brand owners also reach out to us directly. In the long term, we want to build the Rainforest brand as a trusted partner for e-commerce brand owners, and one reason behind our success is our fair treatment of entrepreneurs through the acquisition process.
We use technology to support acquisitions in many ways – to find interesting brands (via our outreach programme). We have a proprietary solution to evaluate the performance of Amazon-native brands and a proprietary risk mitigation tool, allowing us to spot black-hat activities.
Rainforest focuses on specific categories like home goods, mother & kids, personal care, and pet products. What drove the decision to specialise in these categories? How do you evaluate potential brands within these sectors?
We have brands in all those categories, but the central one is the parent/juvenile category and, to a lesser extent, ‘home’.
Other than solid financial metrics, we look for brands with unique IP – like a patented product or design/brands with a strong social following, and other aspects like products with high repeat purchase rates, low refund rates, good reviews, etc.
The funding rounds for Rainforest have been quite successful. How have you attracted significant investment, and how do you plan to utilise these funds to achieve your growth objectives?
We were able to build a strong team early that performed incredibly well. This helped us back up our big ambitions with big numbers – the rest was down to good timing and finding investors who shared our vision.
Besides acquisitions, we are investing a lot more in product development, where we want to become category-leading. We are also building an umbrella brand to house all of our products and allow us to nurture the relationship with parents over a longer period.
Can you elaborate on Rainforest’s strategies to ensure that the brands you acquire continue to thrive and grow globally? How do you balance maintaining the brand’s identity and integrating them into your ecosystem?
On the brand identity side, the brands have been mostly independent. The growth story for each brand is unique, but we have been quite successful in our product launches, geo and channel expansion.
Another thing that worked well for us was lowering costs (especially manufacturing and shipping) to offer customers more affordable products, allowing us to grow our market share sustainably.
The concept of providing entrepreneurs with a healthy exit through acquisition is intriguing. How do you approach negotiations with brand owners, and what benefits does Rainforest offer entrepreneurs looking to exit their businesses?
We don’t have any special approach to negotiating. We offer entrepreneurs an exit and future incentives in profit-sharing and other milestone payments. The ideal scenario for us is to find great entrepreneurs who would like to stay on with Rainforest and where we can continue growing the brand together while offering the entrepreneur the opportunity to take some money off the table through the acquisition.
Your technology-driven approach, including inventory management and cost optimisations, sets Rainforest apart. Could you share some insights into how this technology works and its impact on brand performance and growth?
Our custom-made data platform lets us stay on top of all our brands in real time. It drives all key insights and ensures that our decisions are truly data-driven.
Coupled with a range of bought tools in AI and process automation, we believe we have a solid foundation that gives us a competitive advantage on Amazon and beyond.
Our ERP is the focal point for all our finance and inventory-related data. We then buy solutions that integrate with the ERP, like our forecasting and planning tool. This is an area where we will continue to invest – to automate processes further – supporting Rainforest through future growth.
Expansion into new marketplaces and channels is a crucial part of your strategy. How do you assess which marketplaces and channels are the best fit for the brands you acquire? What challenges do you face during this expansion?
We were initially focused on Amazon US as a channel/marketplace. It allowed us to run relatively simple operations while we scaled to where we are today.
We are now positioned to grow into new marketplaces and channels and primarily invest in D2C, wholesale, and Walmart. Walmart is an exciting marketplace because of their strong growth (although currently a lot smaller than Amazon), and we are deliberate about being early on this channel.
Challenges are plenty: Logistics/supply chain, product regulations, and much more.
Achieving unicorn status is a significant milestone for any startup. What key milestones and achievements do you see paving the way for Rainforest to become a unicorn shortly?
Unicorn status is not a goal in itself. We must continue taking sustainable steps forward, build a high-performing company culture, invest in innovation, and build trust with parents everywhere.
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