Some of the biggest names on Wall Street and in Silicon Valley — JPMorgan Chase, Advent International, Khosla Ventures among them — are pumping billions of dollars into mom-and-pops selling everything from tea kettles to jock itch remedies on Amazon.com.

Investment banks, venture firms and private equity shops are backing so-called Amazon aggregators — often led by e-commerce veterans — that are betting they can take up-and-coming sellers, who often operate out of their garages, and transform them into global brands. The aggregators say they have the expertise to select strong products and avoid faddish ones that flame out before they have a chance to grow.

The latest entrant, Branded Group, said last week that it had purchased 20 houseware and leisure brands. Formed last summer and flush with $150 million raised by the Berlin venture firm Target Global, Branded will be run by Pierre Poignant, who previously led the Southeast Asian online marketplace Lazada, and Michael Ronen, who spent almost 20 years in mergers and acquisitions at Goldman Sachs and also worked for SoftBank’s Silicon Valley venture division.

"We want to be a multibillion dollar company," says Poignant, who oversaw the sale of Lazada to Alibaba Group. Poignant acknowledges that "buying businesses is one thing. Scaling them is another."

About 40 Amazon aggregators have emerged in the past few years, according to people following the trend, with most of them still quietly seeking deals behind the scenes. Eight have announced fund-raising rounds totaling more than $2.5 billion since 2019.

Thrasio, launched in 2018, has the deepest pockets and has already purchased 90 companies with $1.75 billion in funding and debt from backers that include the private-equity firm Advent International. Perch, founded in 2020, has raised $130 million and gobbled up almost 30 brands.

The demand for Amazon mom-and-pops reflects the maturation of the e-commerce giant’s third-party marketplace, which accounts for more than half of all products sold on the site. The web store has grown so large that deep-pocketed investors can prospect for tomorrow’s big hit among the millions of merchants competing on the site.

“The emergence of these companies reflects how selling with Amazon offers small businesses powerful opportunities to build their brands and reach millions of customers,” an Amazon spokesperson said in an email.

Thrasio, based in Walpole, Mass., was early to the game but has attracted well-financed competition since the pandemic pushed millions of consumers online, possibly changing shopping habits forever. The news that Thrasio had surpassed a $1 billion valuation in June pulled in even more investors.

Aggregators look for consistent moneymakers with annual sales up to about $10 million; they generally offer three to four times a target’s annual profit, including the salary the owners pay themselves. The buyers don’t focus on specific categories the way a Procter & Gamble does but are content to jam together a potpourri of brands. Perch, for example, sells maternity belts, auto upholstery tools, peppermint-based athlete’s foot cures, and virtual-reality headsets.

The synergies happen on the back-end, where experts in global logistics, search engine optimization, and Amazon advertising can apply their know-how to any profitable product with good reviews. Beyond expertise, the aggregators have the funds mom-and-pop businesses often lack to expand internationally. The aggregators also consolidate their purchasing power with manufacturers and shipping companies to negotiate lower prices.

“Amazon sellers are salivating right now because all of these investors are lining up around the block to buy them,” says James Thomson, a former Amazon executive who now advises online merchants. “Many, many more aggregators will emerge before this starts to slow down.”

The gold rush is happening despite perceptions that Amazon is a hostile environment where merchants can be kicked off after a few bad reviews or bogus counterfeiting charges and sometimes spend months trying to get reinstated. Over the years, some sellers have built decent businesses only to watch Amazon start selling its own versions of their products.

The aggregators say those risks are real but worth taking given the potential rewards of being on a site that captures almost 40 cents of every dollar spent online in the U.S., a figure they expect to keep growing even as stores reopen and people get vaccinated for COVID-19.

Their north star is Anker Innovations Technology, a Chinese company that started selling cellphone chargers on Amazon and grew into a global electronics brand worth more than $10 billion, whose products have graduated from Amazon's web store to the shelves at Walmart and Target.

"Amazon is building a massive economy comparable to the gross domestic product of entire countries," says Branded's Ronen. "I mostly see an opportunity to partner with them. Our interests are aligned."

For Amazon merchants who can’t afford to expand or are simply burned out, the swarm of aggregators offer a viable exit strategy. Tony and Carol Meibock, a husband and wife team from Calgary, Canada, carved out a niche selling soaps and foot soaks made from peppermint and tea tree oil to treat dry skin, jock itch and athlete’s foot. With annual sales in the millions of dollars and their company, Truremedy Naturals, turning a profit, Tony quit his software job to help run the business.

Then demand surged during the pandemic, and the couple found themselves working nonstop. To keep growing required hiring more people, which would have hurt profits and made the company worth less to a buyer. Tony Meibock, 54, put out the word they were selling in in the tight-knit community of online merchants and sold to Perch in January for undisclosed terms.

Once an aggregator buys a business, typical first steps include finding more inventory to expand into Europe and Australia. Bigger factory orders help them negotiate better prices with manufacturers, materials suppliers and shippers. Sometimes small changes go a long way: Perch squeezed silicon straws into smaller packages and shaved 5% off Amazon’s shipping fees. And sometimes it’s a matter of deploying data scientists to determine how much to spend on advertising and search terms to maximize sales and profits.

It’s not always smooth. Amazon suspended a maternity belt brand from the site three weeks after Perch purchased it. For reasons that remain unclear, Amazon suspected the products were counterfeit and halted all sales for two months, costing the aggregator about $500,000 in sales. Aggregators can take such body blows since their sales are spread over more brands, Bell says. “Now we know where the land mines are.”