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4. This Week in M&A Issue #197

This Week in M&A Issue #197

Ahoy there!

Today’s trend of the week is “Ashwagandha tea”. 🍵

Ashwagandha may be a mouthful, but it’s the tea everyone’s talking about for stress relief.

As the name suggests, Ashwagandha tea is made with ashwagandha extract, a herb that’s been used for thousands of years in Indian Ayurvedic medicine. Now, it’s gaining popularity in the U.S. thanks to its potential to reduce stress, ease anxiety, and improve sleep. With up to 75% of Americans reporting ongoing stress or anxiety, there’s a huge demand for natural ways to unwind.

Searches for “Ashwagandha Tea” have gone up 20% in the past year, reaching 17,000 searches last month alone, and TikTok videos about ashwagandha have racked up 1.4 billion views. The whole ashwagandha market is expected to grow to $2.5 billion by 2031.

Whether launching private-label teas, dropshipping herbal wellness products, or building content around adaptogens, there’s real potential to capture attention in this hot market.

Today we have for you:

• Amazon FBA to end prep and labeling services by 2026
• M&A activity is surging in the creator economy

And:

• OpenAI launches GPT-5 and new open source models
• The rapid rise of Gen-AI apps and where the opportunities are
• Amazon sellers can now use Buy with Prime in TikTok Ads

Alright, let’s dive in.

Amazon

Amazon has announced it will no longer offer prep and item labeling services for Fulfillment by Amazon (FBA) shipments starting January 1, 2026.

The update follows a partial rollback earlier this year when Amazon stopped offering prep services for sharp objects. Now, the policy will extend to all inventory entering Amazon’s U.S. fulfillment centers, including items sent via Amazon Warehousing and Distribution (AWD), Amazon Global Logistics (AGL), Amazon SEND, and the Supply Chain Portal.

According to a notice sent to sellers on July 28, Amazon cited improvements in seller packaging practices and the widespread use of third-party prep services as reasons for the change. Many sellers already handle prep and labeling independently or through manufacturers and vetted partners, the company noted.

Sellers must now ensure all products are fully prepped and labeled before they arrive at Amazon facilities. Those who fail to comply risk losing reimbursement eligibility if items are damaged or lost. Shipments created before January 1, 2026, will still receive prep services even if they arrive later, but any shipment created afterward must meet the new requirements.

While Amazon says this move will streamline fulfillment operations and lead to faster delivery for customers, the news has sparked concern in the seller community. Some sellers who lack access to warehouses or logistics teams say they’ll be severely impacted.

To assist with the transition, Amazon recommends sellers either do the prep themselves or partner with vetted third-party service providers. They also highlight the “Ships in Product Packaging” (SIPP) program, which can reduce prep needs and offer FBA fee discounts for qualifying items.

M&A

The creator economy is growing rapidly, and investors are taking notice. This industry includes YouTube channel owners, newsletter writers, online course creators, coaches, and the marketing agencies that support and promote them.

According to Digiday, the creator economy is attracting major interest from private equity firms, holding companies, and influencer marketing agencies, and is expected to reach $480 billion by 2027. In the first half of 2025 alone, there were 52 mergers and acquisitions involving large creator-focused businesses, a 73% increase from the same period in 2024, according to Quartermast Advisors.

Notable deals include Publicis buying influencer platform Captiv8 for $175 million, and PSG investing $150 million into Uscreen, a video membership platform. U.S. influencer marketing spend is also rising, projected to grow from $10.5 billion this year to $13 billion by 2027.

Investors now see creators as more than just individuals producing content; they’re full-fledged businesses. Many have built brands, launched products, and generate steady income through ads and sponsorships.

On our own marketplace, we’ve seen an increase in profitable faceless YouTube channels and digital marketing agencies being sold.

Private equity firms are especially active in buying companies that build tools and services for creators. For instance, Later acquired e-commerce tool Mavely for $250 million. These buyers prefer to acquire established platforms with proven revenue rather than building new ones, which reduces risk and accelerates growth.

AI is also fueling this trend. AI tools now help creators make content faster and help brands find influencers more efficiently. As a result, software and AI-driven platforms made up over a quarter of all creator-related acquisitions this year.

The bottom line? The creator economy is maturing fast, and consolidation is picking up. Major companies, even those outside tech or media, are buying in. Smaller creator businesses and agencies now face a choice: grow, get acquired, or compete in an increasingly crowded space.

AI

ChatGPT is rapidly approaching 700 million weekly active users, up from 500 million in March and nearly quadruple its user base from a year ago. This explosive growth puts it among the most-used platforms on the internet.

Despite this rapid growth, OpenAI isn’t resting on its laurels. On Tuesday, August 5, OpenAI released two new open-weight AI models: gpt-oss-120b and gpt-oss-20b. These are the company’s first open models since GPT-2 and are available on Hugging Face under the Apache 2.0 license, allowing free commercial use.

The larger 120b model can run on a single Nvidia GPU, making it accessible for many independent researchers and enthusiasts. The smaller 20b version is optimized to run efficiently on ordinary consumer laptops with just 16GB of RAM. This means people without access to expensive hardware or cloud resources can still experiment with advanced AI technology right from their own devices.

OpenAI is making moves on both ends of the AI spectrum, from lightweight accessibility to cutting-edge performance. The company officially unveiled GPT-5 during a livestream event on August 7, following weeks of hints from insiders and Altman himself.

However, the company is also dealing with recent privacy concerns. A feature allowing shared ChatGPT conversations to appear in Google search results was removed after users found sensitive information, such as names, resumes, and personal reflections, appearing in search results.

While newly shared chats will no longer be indexed, older links may still show up temporarily due to caching. OpenAI is working with search engines to remove this content and advises users to check their shared links dashboard, as deleting a chat does not remove shared URLs from the web.

Read All About It!

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AI Apps

The generative AI app market is exploding.

According to a new report from Sensor Tower, GenAI apps saw 1.7 billion downloads in the first half of 2025 alone, up from 1 billion just six months earlier. In-app revenue more than doubled to $1.87 billion, showing clear consumer willingness to pay for AI-powered experiences.

User engagement is also soaring. People spent over 15.6 billion hours across 426 billion sessions in the first half of 2025, signaling not just curiosity, but deep usage. Asia is leading the charge in adoption, with markets like India and China driving 80% growth in downloads. North America still dominates monetization with 40% of total revenue, while Latin America posted the highest growth in spending.

ChatGPT is the top revenue-generating GenAI app in nearly every country outside China, with standout engagement. Users spend an average of 16 minutes per day in the app, nearly rivaling Google Search and browser usage. The app’s strong “stickiness” (used an average of 12 days per month) makes it more than just a productivity tool; people are relying on it for personal finance, meal planning, health advice, and entertainment. In Q2 2025, over a third of ChatGPT prompts were lifestyle-related.

The rise of cross-platform usage is also worth noting. Over 15% of U.S. users access ChatGPT on both mobile and web, a stat that outpaces many major apps and points to the value of building seamless, multi-platform experiences.

There’s also been a spike in apps branding themselves with “AI.” More than 100,000 apps now include “AI” in their descriptions, and these accounted for 7.5 billion downloads in the first half of 2025, about 10% of all installs. Adding “AI” to your app name or description can give you a temporary boost in visibility, especially in categories like content generation, photo editing, study tools, translation, and wellness.

For digital entrepreneurs, GenAI is a high-growth category with global traction, sticky user behavior, and real revenue potential.

Amazon

Through a new integration, TikTok ads can now support Buy with Prime, allowing shoppers to discover products in TikTok content and complete their purchase using their Prime benefits, without ever leaving the app.

This integration could be a game-changer, especially for products with viral potential. Instead of building out TikTok Shop listings or managing its fulfillment (TTF), you can leverage TikTok purely for discovery and let Amazon handle the transaction and shipping.

If you already have Buy with Prime or use Amazon Multi-Channel Fulfillment (MCF), you can now run TikTok ad campaigns that send traffic to your DTC site while still offering the familiar Amazon checkout experience.

To make it work, sellers need an active TikTok Ads Manager account and Buy with Prime set up on their website. The ads will show Prime branding and real-time delivery estimates, adding trust and urgency for TikTok shoppers. Note: Buy with Prime doesn’t support video catalog ads yet, so you’ll need to use static carousel ads and choose “Shop Now” as your call-to-action.

The challenge? Attribution. Because the purchase is processed through Amazon, TikTok’s ad platform can’t see the final conversion, which may make it harder to track ROI. Sellers using this integration will need to rethink how they measure ad performance across platforms.