Most consumer brands on Amazon have few choices. They can either give control to a big agency and become just another client, or try to build their own team, which can be expensive, slow, and risky.
After years of watching brands struggle with pricing, content, and distribution, Anthony Connelly and Spencer Jacobs started Neato in 2018. Their idea was to offer a third choice: buy inventory straight from brands, act as their only online retailer, and handle everything from advertising and logistics to brand protection and analytics as one partner instead of using several vendors.
This model, known as second-party (2P) commerce, just attracted $25 million in growth funding, led by Advantage Capital, and joined by other investors, not disclosed to TFN, to move beyond Amazon into other marketplaces where its brand partners’ customers shop.
The company mainly works with upper-middle-market to pre-enterprise consumer brands across pet products, hard goods, groceries, beauty, supplements, and personal care. Instead of charging service fees like Forum Brands and Thrasio, Neato buys inventory and takes on the risk of sales. Brands get a team focused solely on their business, rather than account managers juggling many clients.
“Most brands at our scale have two bad options — hand your business to a massive operator where you’re one of hundreds, or try to figure out Amazon yourself with a patchwork of internal hires, agencies and consultants. We built a third option. We buy the inventory, manage everything from advertising to logistics to brand protection, and run a portfolio where every brand gets a team that wakes up thinking about their business every day,” says Connelly.
Since starting in 2018, Neato has grown quickly. It was ranked the 39th-fastest-growing company in America on the Inc. 5000 list in 2022 and has passed the nine-figure mark in total revenue. Today, Neato operates in 10 countries and is a top-500 Amazon storefront.
“Neato’s 2P model, combined with their expansion beyond Amazon into other channels, positions them at the centre of where marketplace commerce is heading,” notes Philip Ruppel from Advantage Capital, a Principal on the investment team.
The new funding will help Neato open two operations centres in Las Vegas and Chicago, both set up for e-commerce prep. It will also accelerate work on Neato’s AI agent stack, which supports pricing, inventory, and advertising.
The next stage will show if Neato’s model can work outside Amazon, where it already has a strong advantage, in the wider marketplace. Platforms like Walmart, TikTok Shop, and direct-to-consumer channels each have their own challenges.
