Neato raises USD $25 million to expand beyond Amazon

Neato has raised USD $25 million in a growth funding round led by Advantage Capital. The investment will support the Las Vegas company's expansion of its second-party marketplace model beyond Amazon.

The funding will also support two new operations centres in Las Vegas and Chicago, including eCommerce preparation functions, as well as further development of its artificial intelligence tools. Neato buys inventory directly from consumer brands and manages sales across online marketplaces.

Founded as a wholesale distributor in 2018, the business later shifted its model after leadership saw brands struggling to manage their Amazon operations while maintaining control over pricing, content and distribution. It now describes itself as an exclusive online retail partner for consumer goods brands, mainly in the upper-middle-market to pre-enterprise segment.

That approach has attracted growing investor attention as brands look to reduce reliance on a single marketplace and navigate a more fragmented online retail environment. Rather than charging only for advisory work, Neato purchases stock and takes responsibility for listings, advertising, logistics, creative work, brand protection and reporting.

Model shift

Neato's second-party (2P) structure differs from the agency and aggregator models common in online retail. Under its model, brands retain control over strategy and positioning, while Neato handles retail execution and profit-and-loss responsibility.

It manages a portfolio of consumer packaged goods brands across pet care, hard goods, grocery, beauty, supplements and personal care. The company argues that medium-sized brands are often poorly served by larger marketing groups that manage hundreds of accounts and treat marketplaces as secondary channels.

Anthony Connelly, Founder and Chief Executive Officer of Neato, said the funding would help extend the model across more digital sales channels.

"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 so every brand gets a team that wakes up thinking about their business every day. There's real capital flowing into this category because the model works. This investment lets us take it beyond Amazon into every channel where our brands' customers are shopping," said Anthony Connelly, Founder and Chief Executive Officer, Neato.

Investor interest

The funding round comes amid broader interest in businesses that sit between brands and digital marketplaces. Investors have increasingly backed operators that promise to handle the complexity of selling on online marketplaces without taking ownership of the brands themselves.

That marks a departure from an earlier wave of eCommerce investment focused on buying consumer brands outright and combining them under a single operating platform. By contrast, Neato's model centres on commercial partnerships with brands while taking direct responsibility for inventory and execution.

Advantage Capital cited that shift as one reason for its investment. The firm sees demand for operators whose financial returns are tied more closely to brand performance than to service fees.

"The eCommerce enablement sector is at an inflection point," said Philip Ruppel, Principal, Advantage Capital. "Capital is flowing toward operators that align their economics with brand success rather than extracting fees from complexity. Neato's 2P model, combined with their expansion beyond Amazon into other channels, positions them at the center of where marketplace commerce is heading."

Beyond amazon

For brands, the backdrop is an online retail market in which Amazon remains central but is no longer enough on its own for many sellers. Companies have been reassessing their marketplace strategy as competition increases, customer acquisition becomes more costly, and retail activity shifts across multiple digital channels.

Neato argues that brands can retain more control over pricing and positioning than they might under a conventional distribution arrangement, while avoiding the need to build internal marketplace teams and hire external advisers. Its integrated model includes services that many brands would otherwise buy separately.

The expansion into new operations centres suggests the company is investing in the physical side of the business as well as software. Because it manages inventory directly, the model depends on warehousing, preparation and logistics as much as advertising and marketplace management.

Neato began pioneering second-party commerce in 2020 after starting as a traditional distributor. The latest funding provides fresh capital to expand that model at a time when both brands and investors are rethinking how online retail should be managed.