Seattle startup Downstream, which helps brands with their Amazon ads, acquired by Jungle Scout

Downstream co-founders Salim Hamed (left, CTO) and Connor Folley (CEO). (Downstream Photo)

Jungle Scout raised $110 million and today announced the acquisition of Downstream, a Seattle startup that helps brands with their Amazon advertising strategies. Terms of the deal were not disclosed. Downstream will add its 11-person team to Jungle Scout, a 200-person Austin-based company that offers a suite of tools for Amazon sellers.

Downstream is among a group of startups building software that helps vendors, sellers and agencies manage marketing investments on Amazon, which has seen advertising spend on its e-commerce site skyrocket in recent years along with growth of its third-party seller arm.

Downstream crunches various data to provide clients with ad-spend recommendations on Amazon. The Techstars Seattle grad said it has had year-over-year revenue growth of more than 200% since it launched.

Connor Folley, an ex-Amazon marketing manager, and Salim Hamed, who worked in business intelligence engineering for Amazon Web Services, launched the company in late 2017.

“Since March of last year we’ve been living in an e-commerce-first world, and that has made Amazon the most important channel for most brands,” said Folley. “That has meant that Downstream has become mission critical to managing their presence on Amazon, so we’ve experienced significant growth.”

The company has 5,000 customers and raised $5 million to date from investors including Haystack, Liquid2 Ventures, Techstars, Unlock Venture Partners, Revel Partners, DNX, Founders’ Co-op, Fabric Media, and 9Mile Labs.

Third-party sellers are responsible for more than 50% of Amazon’s “total paid units,” a percentage that has steadily increased over the past decade. That number reached a record high 55% in the fourth quarter. Revenue from Amazon’s third-party seller services spiked 57% in the holiday quarter to $27.3 billion, making up 21% of the company’s total revenue.

Founded in 2015, Jungle Scout has more than 500,000 customers. Summit Partners led the funding round.

“Jungle Scout sought out the absolute best AI-powered advertising technology to add to our platform,” Jungle Scout CEO Greg Mercer said in a statement. “We evaluated dozens of tools, and Downstream emerged as a clear leader for its capabilities in managing and optimizing Amazon advertising programs.”

There are several startups in Seattle helping brands sell on Amazon and other online retail platforms, including Stackline, InsightLeap, Ideoclick, Replenium, Gradient, Fabric, and SoundCommerce.

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