Wonder Brands picks up $20M, aims to build marketplace of Latin American e-commerce brands

E-commerce roll-up companies are big in the United States, and Wonder Brands wants to be that for Latin America.

The Mexico-based company closed on $20 million in seed funding, co-led by ALLVP and Mountain Nazca, with participation from CoVenture, Victory Park Capital, GFC, QED (Fontes), Korify Capital and Endeavor Catalyst.

Wonder Brands co-founders Nicolás Gonzalez Luna and Federico Malek came together to start the company in January 2021 to acquire digital brands in the MercadoLibre and Amazon ecosystem. It then leverages its technology to scale their operations and grow sales by taking care of the marketing, analytics, supply chain management and working capital needs of the companies. It focuses on companies in the areas of home and garden, sports and fitness, beauty and personal care.

“MercadoLibre has a larger share, but Amazon is entering the region quickly, so there is not one dominating marketplace. MercadoLibre may have half the market, but then it is more balanced between a number of different platforms,” Gonzalez Luna told TechCrunch. “That diversification means operations here are more complex than the classic Amazon seller. Negotiations take longer and require more discussion about who you are to get the trust in you. That’s why we will be doing fewer, but larger deals than our U.S. counterparts.”

Malek’s background is on the commerce side, having worked at Argentinian insurtech company iunigo.com before founding e-commerce fulfillment company Avenida.com, which was acquired by Groupon in 2010. He then worked as Groupon’s managing director in the region. He knew Gonzalez Luna, whose background includes Goldman Sachs where he focused on M&A.

Michael Breitstein, principal at CoVenture, said his firm has made a variety of investments on the debt and equity sides of e-commerce and believes Malek and Gonzalez Luna provide a “great one-two punch” with their backgrounds, as well as the ability to raise capital and build out a platform.

Though there is a lot of competition to acquire digitally native companies in the $1 million revenue range, Malek said Wonder Brands will focus on larger sellers and operators, with a deal target of at least $5 million in revenue. They are also taking a “buy and build” approach rather than the “buy and consolidate” business model many of the other roll-up companies have, he added.

With its approach, the company’s goal is to enable its acquired companies to sell on multiple channels. It provides support in four areas: category management and brand development, marketing and performance, technology to automate processes like inventory and logistics and operations to manage all of the channels needed. For example, in Latin America, inventory has to be consolidated into one warehouse, but then separated depending on the sales channel, Malek.

Acquiring and scaling companies is big business. London-based Hahnbeck Business Systems, an e-commerce M&A firm that tracks funding to FBA (fulfillment by Amazon) acquirers all over the world, reports that e-commerce roll-up companies raised $7.24 billion in disclosed funding to date.

According to the different sources, reports say Latin American e-commerce company MercadoLibre has a market cap of between $70 billion and $94.billion. Meanwhile, marketplace merchants accounted for 55% of units sold on Amazon.com, according to the retailer. In 2020, that accounted for $300 billion in sales, according to Marketplace Pulse estimates based on Amazon disclosures.

The seed financing enables Wonder Brands to invest in building a team to focus on the four support areas and marketing. The company has 20 employees currently and plans to triple that in the next month. The funding is also complementing larger debt facilities that the company has available to acquire brands. Its target is to make six or seven acquisitions this year.

The company is on target to achieve $55 million in revenue by the end of the year and will then move toward $100 million in revenue in the next 12 months, Malek said. It currently operates in Mexico and plans to begin operations in Brazil by the end of 2021.

 

#allvp, #amazon-com, #coventure, #e-commerce, #ecommerce, #federico-malek, #funding, #groupon, #latin-america, #mercadolibre, #michael-breitstein, #mountain-nazca, #nicolas-gonzalez-luna, #paypal, #recent-funding, #retailers, #startups, #supply-chain-management, #tc, #victory-park-capital, #wonder-brands

The LatAm funding boom continues as Kaszek raises $1B across a duo of funds

Long before SoftBank launched its $2 billion Innovation Fund in Latin America, and before Andreessen Horowitz began actively investing in the region, Sao Paulo-based Kaszek has been putting money into promising startups since 2011, helping spawn nine unicorns along the way.

And now, the early-stage VC firm is announcing its largest fund closures to date: Kaszek Ventures V, a $475 million early-stage fund, believed to be the largest vehicle of its kind ever raised in the region, and Kaszek Ventures Opportunity II, a $525 million for later-stage investments.

Over the years, Kaszek has backed 91 companies, which the firm says collectively have raised over $10 billion in capital. 

MercadoLibre co-founder Hernán Kazah and the company’s ex-CFO, Nicolas Szekasy, founded Kaszek a decade ago after leaving LatAm’s answer to Amazon. Fun fact: the firm’s name comes from a combination of their two last names: Ka-Szek. Rounding out the team are Nicolas Berman, former VP at MercadoLibre, Santiago Fossatti, Andy Young and Mariana Donangelo.

Kaszek founded its first fund in 2011, raising $95 million, an impressive sum at that time. Funds II and III closed in 2014 and 2017, raising $135 million and $200 million, respectively. By 2019, Kaszek had closed on its fourth fund, raising $375 million and its first Opportunity Fund, reserving $225 million for later-stage investing in existing portfolio companies.

It’s notable that in its fifth fund, Kaszek is reserving more of its new capital to fund later-stage investments – a testament to its faith in its current portfolio. Both funds, according to Kaszek, were “several times oversubscribed” with demand coming globally from university endowments, global foundations, technology funds and several tech entrepreneurs.

Silicon Valley-based Sequoia Capital has been an LP since day one via Sequoia Heritage, its community investment office. Also, Connecticut-based Wesleyan University is an LP with Chief Investment Officer Anne Martin describing the founding team as “internet pioneers.”

In recent years, there has been an explosion of global investor interest in Latin American startups. The region’s startup scene is seeing a surge of fundraises, with new unicorns emerging with increasing regularity. And Kaszek has been at the heart of it all.

“We have been at the epicenter of the technology ecosystem in Latin America since 1999, first with MercadoLibre and now with Kaszek, and have witnessed firsthand the extraordinary  evolution that the sector has experienced since its infancy,” said managing partner and co-founder Kazah. “When MercadoLibre started, the internet penetration was less than 3% and it was mostly dial-up connections. Today, more than two decades later, technology secular trends are stronger than ever before as we are experiencing an acceleration towards digitalization.”

Kaszek has not yet backed any companies out of its newest investment vehicles, but plans to put money in 20 to 30 companies out of its early-stage fund, with check sizes ranging from $500,000 to $25 million, according to Kazah. Its Opportunity Fund investments will be more concentrated with the firm likely backing 10 to 15 companies with check sizes ranging from $10 million to $35 million. The firm is industry agnostic, with Kazah saying it considers “any industry where technology is playing a transformational role.”

General partner and co-founder Szekasy says that In the firm’s first funds, Kaszek mostly backed first-time entrepreneurs. But in its last early-stage fund, it began backing more teams led by repeat entrepreneurs or by founders spawned out of some of the region’s more successful startups. As many VC firms do, Kaszek describes its investment strategy as providing more than capital, but also becoming partners with the founders of its portfolio companies. For example, Creditas founder and CEO Sergio Furio describes the firm as “the co-founder I did not have.”

While the firm declined to comment on performance, a source with firsthand knowledge of its metrics over the years tells TechCrunch that it’s quite impressive with MOICS ranging from 19.2 for Fund I, 10.5 for Fund II, 4.9 for Fund III and 2.6 for Fund IV.

The firm’s active portfolio currently consists of 71 companies. Kaszek was one of the earliest investors in Brazilian neobank Nubank, just one of 9 unicorns it has helped build over the years. Other unicorns it’s backed include MadeiraMadeira, PedidosYa, proptech startup QuintoAndar, Gympass, Loggi, Creditas, Kavak and Bitso.

The firm’s investments have largely concentrated in Brazil and Mexico (the two startup hotspots of the region) and Colombia but the firm has also backed startups based in other countries in the region such as DigitalHouse (which was formed in Argentina), NotCo (originally founded in Chile) and Kushki (launched first in Ecuador). It has people on the ground in its home base of Brazil as well as Mexico, the United States, Argentina and Uruguay. 

“We have always believed that the strong secular technology trends that we were seeing 20 years ago, evident in the US and a little later in China, were going to happen in Latin America,” Kazah told TechCrunch. “…Everything we predicted back then was going to happen, happened. Maybe it happened later, but it was also much larger and more comprehensive than what we had initially imagined. That is typically what happens with innovations, they take off later than you think, but fly much higher than you ever imagined.” 

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Armed with $160M in funding, LatAm’s Merama enters the e-commerce land grab

Merama, a five-month old e-commerce startup focused on Latin America, announced today that it has raised $60 million in seed and Series A funding and $100 million in debt.

The money was raised “at well over a $200 million valuation,” according to co-founder and CEO Sujay Tyle.  

“We are receiving significant inbound for a Series B already,” he said.

LatAm firms Valor Capital and Monashees Capital and U.K.-based Balderton Capital co-led the “massively oversubscribed” funding round, which also included participation from Silicon Valley-based TriplePoint Capital and the CEOs of four unicorns in Latin America, including Uala, Loggi, Rappi and Madeira Madeira. 

Tyle, Felipe Delgado, Olivier Scialom, Renato Andrade and Guilherme Nosralla started Merama in December 2020 with a vision to be the “largest and best-selling set of brands in Latin America.” The company has dual headquarters in Mexico City and São Paulo.

Merama partners with e-commerce product sellers in Latin America by purchasing a stake in the businesses and working with their teams to help them “exponentially” grow and boost their technology while providing them with nondilutive working capital. CEO Tyle describes the company’s model as “wildly different” from that of Thras.io, Perch and other similar companies such as Valoreo because it does not aggregate dozens of brands.

“We will work with very few brands over time, and only the best, and work with our entire team to scale and expand these few businesses,” Tyle told TechCrunch. “We’re more similar to The Hut Group in the EU.”

Merama expects to sell $100 million across the region this year, more than two times the year before. It is currently focused on Mexico, Brazil, Argentina and Chile. Already, the company operates “very profitably,” according to Tyle. So the cash raised will go primarily toward partnering with more brands, investing in building its technology platform “to aid in the automation of several facets” of its partners’ brands and in working capital for product innovation and inventory purchases. 

The 42-person team is made up of e-commerce leaders from companies such as Amazon, Mercado Libre and Facebook, among others. Tyle knows a thing or two about growing and building new startups, having co-founded Frontier Car Group, which sold to OLX/Naspers for about $700 million in 2019. He is also currently a venture partner at Balderton. 

It’s a fact that Latin American e-commerce has boomed, particularly during the pandemic. Mexico was the fastest-growing e-commerce market in 2020 worldwide, yet is still in its infancy, Tyle said. Overall, the $85 billion e-commerce market in Latin America is growing rapidly, with projections of it reaching $116.2 billion in 2023.

“Merchants are seeing hypergrowth but still struggle with fundamental problems, which creates a ceiling in their potential,” Tyle told TechCrunch. “For example, they are unable to expand internationally, get reliable and cost-effective working capital and build technology tools to support their own online presence. This is where Merama comes in. We seek to give our partners an unfair advantage. When we decide to work with a team, it is because we believe they will be the de facto category leader and can become a $1 billion business on their own.”

Merama collaborates with e-commerce giants such as Amazon and Mercado Libre, and several executives from both companies have invested in the startup, as well.

Daniel Waterhouse, partner at Balderton Capital, says his firm sees “huge potential” in Merama.

“In our two decades scaling businesses in Europe, we have seen firsthand what defines eCommerce category leaders,” he said in a written statement. “What they have already achieved is breathtaking, and it is just the tip of the iceberg.”

Valor Capital founding partner Scott Sobel believes that creating superior products that connect with consumers is the first key challenge D2C companies face.

“That is why we like Merama’s approach to partnering with these established brands and provide them unparalleled support to scale their operations in an efficient way,” he added.

#amazon, #argentina, #balderton-capital, #brazil, #chile, #daniel-waterhouse, #e-commerce, #ecommerce, #europe, #european-union, #facebook, #frontier-car-group, #funding, #fundings-exits, #latin-america, #merama, #mercado-libre, #mercadolibre, #mexico, #mexico-city, #monashees-capital, #naspers, #olx, #paypal, #rappi, #recent-funding, #retailers, #sao-paulo, #silicon-valley, #startup, #startups, #sujay-tyle, #tc, #techcrunch, #the-hut-group, #triplepoint-capital, #unicorn, #valor-capital, #venture-capital, #websites

Argentina’s Digital House raises over $50M to help solve LatAm’s tech talent shortage

Digital House, a Buenos Aires-based edtech focused on developing tech talent through immersive remote courses, announced today it has raised more than $50 million in new funding.

Notably, two of the main investors are not venture capital firms but instead are two large tech companies: Latin American e-commerce giant Mercado Libre and San Francisco-based software developer Globant. Riverwood Capital, a Menlo Park-based private equity firm, and existing backer early-stage Argentina-based venture firm Kaszek also participated in the financing.

The raise brings Digital House’s total funding raised to more than $80 million since its 2016 inception. The Rise Fund led a $20 million Series B for Digital House in December 2017, marking the San Francisco-based firm’s investment in Latin America.

Nelson Duboscq, CEO and co-founder of Digital House, said that accelerating demand for tech talent in Latin America has fueled demand for the startup’s online courses. Since it first launched its classes in March 2016, the company has seen a 118% CAGR in revenues and a 145% CAGR in students. The 350-person company expects “and is on track” to be profitable this year, according to Duboscq.

Digital House CEO and co-founder Nelson Duboscq. Image Credits: Digital House

In 2020, 28,000 students across Latin America used its platform. The company projects that more than 43,000 will take courses via its platform in 2021. Fifty percent of its business comes out of Brazil, 30% from Argentina and the remaining 20% in the rest of Latin America.

Specifically, Digital House offers courses aimed at teaching “the most in-demand digital skills” to people who either want to work in the digital industry or for companies that need to train their employees on digital skills. Emphasizing practice, Digital House offers courses — that range from six months to two years — teaching skills such as web and mobile development, data analytics, user experience design, digital marketing and product development.

The courses are fully accessible online and combine live online classes led by in-house professors, with content delivered through Digital House’s platform via videos, quizzes and exercises “that can be consumed at any time.” 

Digital House also links its graduates to company jobs, claiming an employability rate of over 95%.

Looking ahead, Digital House says it will use its new capital toward continuing to evolve its digital training platforms, as well as launching a two-year tech training program — dubbed the the “Certified Tech Developer” initiative — jointly designed with Mercado Libre and Globant. The program aims to train thousands of students through full-time two-year courses and connect them with tech companies globally. 

Specifically, the company says it will also continue to expand its portfolio of careers beyond software development and include specialization in e-commerce, digital marketing, data science and cybersecurity. Digital House also plans to expand its partnerships with technology employers and companies in Brazil and the rest of Latin America. It also is planning some “strategic M&A,” according to Duboscq.

Francisco Alvarez-Demalde, co-founder & co-managing partner of Riverwood Capital, noted that his firm has observed an accelerating digitization of the economy across all sectors in Latin America, which naturally creates demand for tech-savvy talent. (Riverwood has an office in São Paulo).

For example, in addition to web developers, there’s been increased demand for data scientists, digital marketing and cybersecurity specialists.

“In Brazil alone, over 70,000 new IT professionals are needed each year and only about 45,000 are trained annually,” Alvarez-Demalde said. “As a result of such a talent crunch, salaries for IT professionals in the region increased 20% to 30% last year. In this context, Digital House has a large opportunity ahead of them and is positioned strategically as the gatekeeper of new digital talent in Latin America, preparing workers for the jobs of the future.”

André Chaves, senior VP of Strategy at Mercado Libre, said the company saw in Digital House a track record of “understanding closely” what Mercado Libre and other tech companies need.

“They move as fast as we do and adapt quickly to what the job market needs,” he said. “A very important asset for us is their presence and understanding of Latin America, its risks and entrepreneurial environment. Global players have succeeded for many years in our region. But things are shifting gradually, and local knowledge of risks and opportunities can make a great difference.”

#brazil, #digital-house, #digital-marketing, #e-commerce, #education, #funding, #fundings-exits, #globant, #latin-america, #marketing, #menlo-park, #mercado-libre, #mercadolibre, #online-courses, #private-equity, #recent-funding, #rise-fund, #riverwood-capital, #san-francisco, #software-development, #startups, #tc, #venture-capital, #venture-capital-firms, #web-developers

Mercado Libre taps Pachama to monitor and manage its $8 million investment in Latin American rainforest restoration

Mercado Libre, one of the largest e-commerce and financial services company from Latin America by market cap, has selected the startup and Y Combinator alumni Pachama as its strategic partner in developing projects to restore ecosystems in Latin America.

The selection of Pachama is part of a program initiated by Mercado Libre, Latin America’s answer to Amazon, which is called Regenera America. The $8 million that Mercado Libre is investing will be in two reforestation projects: the “Mantiqueira Conservation Project”, organized under the auspices of The Nature Conservancy and the “Corridors of Live Project”, designed and implemented by the Instituto de Pesquisas Ecologicas.

Both projects will focus on the reforestation of over three thosuand hectares, through natural regeneration and planting over 1 million trees, restoring biodiversity corridors and protecting hydrological basins in the Atlantic Forest region of Brazil, the two companies said in a statement.

Pachama will provide satellite and machine learning technologies to verify and monitor the carbon sequestration produced by the sweeping reforestation efforts in a deal which leapfrogs Mercado Libre ahead of Microsoft as the young startup’s largest customer.

Software tools provided by Pachama will also increase the efficiency and transparency of the actual reforestation efforts on the ground, the companies said in a joint statement.

The deal between the two companies, and Mercado Libre’s big buy was announced earlier today at a press conference in Argentina and the agreement marks the first time Mercado Libre has tapped money from a recently issued $400 million Sustainability Bond that was designed to finance projects of what the e-commerce giant called “triple impact” in the Latin American region. The bond was issued by JP Morgan and BNP Paribas.

“We’re taking our first steps. We have always tried to do things the hard way and go to the core of problems. We have had a very interesting debate internally about when is the right time to start buying carbon offsets and carbon credits but we also realize that the … getting up and running of projects that generate carbon credits in Latin America was potentially even more of a challenging situation and more of a longterm solution,” said Mercado Libre chief financial officer Pedro Arnt.

“This is a building block of a longer term strategy thinking through not just what we can do for the next two or three years,” Arnt said. 

The Regenera America project has four pieces, Arnt said: measuring and reporting emissions internally for the company; buying clean energy for the company’s operations; providing electric vehicles for its own fleet and assisting its last mile and logistics partners in electrifying their own transportation; and the development of reforestation efforts across Latin America.

“This is setting up an example for more traditional industries across Latin America,” said Diego Saez-Gil, the co-founder and chief executive of Pachama. MercadoLibre is the largest company by market cap in Latin America and serves as a standard bearer for the forward thinking businesses in the region, he said. “Latin America is one of the biggest holders of biodiversity and carbon stocks in the world, and should be playing a more active role in climate mitigation.”

It’s a big step for Pachama as well. The deal marks the first time the young company has involved itself in project origination and provide a new revenue stream to compliment its existing lines of business.

“We are incredibly excited to start helping new reforestation projects get off the ground that have the capabilities to plant millions of trees and remove millions tons of CO2 from the atmosphere. If we are to solve climate change we need more projects like these to start as soon as possible,” said Saez-Gil in a statement. “We are confident that technologies such as AI and satellite imagery are key to scaling these efforts with high integrity, efficiency and transparency. Partnering with world-class organizations such as Mercado Libre, The Nature Conservancy and IPE for our first projects represents an incredible opportunity for us.” 

#argentina, #artificial-intelligence, #biology, #bnp-paribas, #brazil, #chief-financial-officer, #clean-energy, #diego-saez-gil, #e-commerce, #ebay, #electric-vehicles, #jp-morgan, #latin-america, #mercado-libre, #mercadolibre, #microsoft, #nature-conservancy, #pachama, #partner, #paypal, #satellite-imagery, #tc, #y-combinator

Valoreo closes on $50M to roll up LatAm e-commerce brands

A new breed of startups is acquiring and growing small but promising third-party merchants, and building out their own economies of scale.

And while there are a number of such startups based in the U.S. and Europe, none had emerged in the Latin American market. Until now.

Valoreo, a Mexico City-based acquirer of e-commerce businesses, announced Tuesday that it has raised $50 million of equity and debt financing in a seed funding round.

The dollar amount is large for a seed round by any standards, but most certainly ranks among the highest ever raised by a Latin American startup — further evidence of increased investor interest in the region’s burgeoning venture scene

Upper90, FJ Labs, Angel Ventures, Presight Capital and a slew of angel investors participated in the round. Those angels included David Geisen, head of Mercado Libre Mexico; BEA Systems’ co-founder Alfred Chuang; and Tushar Ahluwalia, founder of Razor Group, a European marketplace aggregator, among others.

Founded in late 2020, Valoreo aims to invest in, operate and scale e-commerce brands as part of its self-described mission “to bring better products at more affordable prices” to the Latin American consumer.

“We were substantially oversubscribed and were therefore able to select investors that not only provide capital, but also additional know-how in key areas,” said co-founder Alex Gruell.

Valoreo joins the growing number of startups focused on rolling up e-commerce brands.

The company’s model is similar to that of Thrasio — which just raised another $750 million–  and Perch in the U.S. But Valoreo says its approach has been tailored to “the specific needs of the Latin American market and is specifically focused on the Latin American end customer.”

Another new company in the space called Branded recently launched its own roll-up business on $150 million in funding. Others in the space include Berlin Brands Group, SellerX, Heyday and Heroes.

But as my colleague Ingrid Lunden points out, “the feverish pace of fundraising in the area of FBA roll-ups feels very much like a bubble in the market — not least because none of these still-young companies have yet to prove that the strategy to buy up and consolidate these sellers is a useful and profitable one.”

How it works

Valoreo (which the company says is an extension of the Spanish word “valor,” meaning to add value), acquires merchants that operate their own brands and primarily sell on online marketplaces such as Mercado Libre, Amazon and Linio. The company targets brands that offer “category-leading products” and which it believes have “significant growth potential.” It also develops brands in-house to offer a broader selection of products to the end customer.

Like Thrasio, Valoreo says it’s able to help entrepreneurs who may lack the resources and access to capital to take their businesses to the next level.

Co-founder and co-CEO Stefan Florea says the company takes less than five weeks typically from its initial contact with a seller to a final payout. 

Then, the acquired and developed brands are integrated into the company’s consolidated holding. By tapping its team of “specialists” in areas such as digital marketing and supply chain management, it claims to be able to help these brands “reach new heights” while giving the entrepreneurs behind the companies “an attractive exit,” or partial exit in some cases.

We have different structures, always taking into account the personal objectives of the seller,” Stefan Florea added.

Generally Valoreo acquires the majority of the business, with the purchase price typically being a combination of an upfront cash payment and a profit share component so sellers can still earn money.

Looking ahead, Valoreo plans to use its new capital mostly to acquire and develop “interesting” brands, as well as build out its current team of 10 while expanding its infrastructure and operations.

The company is currently focused on the Mexican and Brazilian markets, but is planning its expansion into other Latin American countries where it has strong local support systems, such as Colombia, according to co-founder Martin Florea.

Our mission is to be a pan-Latin American player providing value to the entire region,” Martin Florea said. “Latin America in general and Mexico in particular are in a distinct situation which provides phenomenal opportunities for e-commerce merchants on the one hand but also presents particular challenges on the other hand.”

Those challenges, according to Martin Florea, include limited access to growth capital, a lack of specialized expertise in certain areas (such as supply chain management), limited opportunities to sell their business and pursue new ventures, as well as operational burdens and the lack of capacities to expand into new countries and marketplaces.

Valoreo emphasizes it is not out to compete with Mercado Libre, Amazon and other regional marketplaces but instead wants to partner with them.

“Without these platforms, this opportunity would not exist,” Martin Florea said.

Hernán Fernández, founder and managing partner of Angel Ventures, believes Valoreo “will add a lot of value” to the Latin American e-commerce landscape, which is experiencing both market growth and the fragmentation of the seller space.

Jüsto co-founder and CEO (and Valoreo investor) Ricardo Weder notes that the e-commerce market is at an inflection point in Latin America. According to eMarketer, the region was the fastest-growing e-commerce market in the world in 2020, with 37% year over year growth. However, it is a much more fragmented and crowded market compared to other regions, such as the United States.

This, Valoreo believes, provides an opportunity for consolidation.

“There are still many consumers that are not aware of the great variety of outstanding local brands that sell innovative products on marketplaces online,” Stefan Florea said. “In the U.S. or Europe e-commerce is the new way of shopping, offering an even greater range of products and brands than offline shopping. We firmly believe it will not take long until end-customers in Mexico and across Latin America discover all the benefits that e-commerce offers.”

#amazon, #angel-ventures, #e-commerce, #ecommerce, #funding, #latin-america, #mercadolibre, #mexico, #mexico-city, #online-marketplace, #online-marketplaces, #recent-funding, #ricardo-weder, #startups, #thrasio, #valoreo

Nuvemshop, a Latin American answer to Shopify, raises $30 million

After several failed startup attempts and nine years spent building Nuvemshop into Latin America’s answer to Shopify, the four co-founders of the company have managed to raise $30 million in venture capital funding as they look to expand their business.

The new funding came from previous investor Kaszek Ventures and new lead investor Qualcomm, with participation from FJ Labs, IGNIA, Elevar Equity and Kevin Efrusy, from the longtime Accel Partners investor’s personal wealth.

It’s been a long road since Santiago Sosa, Alejandro Vazquez, Martin Palombo, and Alejandro Alfonso first began working together in Buenos Aires The quartet started off on their entrepreneurial journey trying to develop a marketplace software product for Latin America, but when that didn’t take off, they turned their attention to a more basic problem — how to get small and medium-sized businesses selling online.

Now the company boasts 65,000 businesses that use its platform providing everything from billing and payment processing to logistics and shipping solutions transacting over $100 million per month in sales. Operating as Nuvemshop in Brazil and Tiendanube in the rest of the region, the company has offices in São Paulo, Buenos Aires, and Mexico City with plans to expand into Colombia and Peru in 2021.

Nuvemshop began as more of a consulting business and evolved into the suite of software tools that have managed to attract attention from investors like Qualcomm Ventures.

“Nuvemshop’s platform accelerates a company’s digital transformation and has enabled thousands of SMBs across Latin America to go digital by tapping into the company’s one-stop shop of seamlessly integrated solutions,” said Alexandre Villela, senior director of Qualcomm Technologies Inc. and managing director at Qualcomm Ventures Latin America. “We share their strong engineering focus and look forward to helping them scale their business with our investment.” 

Nuvemshop raised its first money in 2015 from Kaszek Ventures (a $5 million investment) and as the business picked up steam raised $7 million more from local investors.

It makes money by charging a subscription fee that begins at $3 per month and a transaction fee that decreases as customers buy more expensive subscription packages.

Now that the company has an established footprint in the region, it’s going to focus on three new areas of growth, according to chief executive, Santiago Sosa.

Nuvemshop chief executive, Santiago Sosa. Image credit: Nuvemshop

The company plans to launch a payment processing and logistics gateway of its own. That marketplace will give customers access to more robust shipping solutions thanks to the power of bundling lower demand into a single delivery and ordering system. Nuvemshop also pitches its customers an app store for connecting them to new developer tools.

Finally, the company intends to offer a broader array of financial services. It already offers payment processing, but will look to develop additional services around lending based on revenue.

Like Shopify, Nuvemshop provides a necessary ballast to the big e-commerce aggregation sites like MercadoLibre and Amazon . “Everything they do they try to optimize for the buyer,” Sosa said. That places incredible pricing pressure on retailers and Nuvemshop offers a direct sales alternative, with lower fees, according to Sosa.

The pent up demand that Sosa sees, is fairly astonishing.

“People are talking about e-commerce penetration going from [roughly] 10% over total retail sales to [roughly] 20%, as it has happened in other countries. We see it differently, as we envision a massive disruption around commerce in the next 15 years, and are pretty confident that [roughly] 90% of retail will be somehow tech-enabled,” said Sosa, in a statement. 

 

#amazon, #fj-labs, #kaszek-ventures, #kevin-efrusy, #mercadolibre, #qualcomm, #qualcomm-ventures, #shopify, #tc

Brazil’s BizCapital raises $12 million for its online lending service

BizCapital, an online lender based in Brazil, has raised $12 million from a clutch of investors including the German development finance institution, the corporate venture capital fund of MercadoLibre and existing investors Quona Capital, Monashees, Chromo INvest and 42K Investments.

“This latest round reinforces investors’ confidence in BizCapital’s ability to innovate in the Latin American credit market amid challenging circumstances caused by Covid-19,” said Francisco Ferreira, the company’s chief executive, in a statement. “We have seen four times as many business credit inquiries on our site year over year, and we are ready to serve them.” 

Founded in 2016, the company pitches itself as a fast and reliable way to access financing for working capital. It already has more than 5,000 customers across 1,200 cities in Brazil, according to a statement.

The company said it would use the money to develop new products for Brazilian small and medium-sized businesses and will expand into new distribution channels.

“With this new round of capital, we will continue to widen our product lineup, helping entrepreneurs during the entire lifecycle of their companies,” said Ferreira, in a statement. “There’s never been a more important time for innovation.” 

In a reflection of their American counterparts, Brazil’s venture capital firms had slowed down the pace of their investments, but now it seems like a slew of new deals are coming to market.

The investment reflects the longterm confidence that investors have in the increasingly central position e-commerce and technology-enabled services will have in the future of the Latin American economy.

 

 

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Remessa Online raises $20 million to become the TransferWise of Latin America

Remessa Online, the Brazilian money transfer service, said it has closed on $20 million in financing from one of the leading Latin American venture capital firms, Kaszek Ventures, and Accel Partners’ Kevin Efrusy, the architect of the famed venture capital firm’s Latin American investments.

Since its launch in 2016, Remessa Online has provided a pipeline for over $2 billion worth of international transfers for small and medium-sized businesses in the country. The company now boasts over 300,000 customers from 100 countries and says its fees are typically one eighth the cost of the local money transfer options.

“We understand that transferring money is just the beginning, and we are eager to build a global financial system that will make life easier for global citizens and businesses alike,” Liuzzi said.

Money transfer services are a huge business that startups have spent the last decade trying to improve in Europe and the U.S. European money transfer company, TransferWise has raised over $770 million alone in its bid to unseat the incumbents in the market. Meanwhile, the business-to-business cross-border payment gateway, Payoneer, has raised roughly $270 million to provide those services to small businesses.

Remessa Online already boasts a powerful group of investors and advisors including André Penha, the co-founder of apartment rental company QuintoAndar, and the former chief operating officer of Kraft Heinz USA, Fabio Armaganijan. With the new investment from Kaszek Ventures, firm co-founder Hernan Kazah, also the co-founder of the Latin American e-commerce giant MercadoLibre, will take a seat on the company’s board.

“We developed an online solution that is faster and substantially cheaper than traditional banking platforms, with digital and scalable processes and omnichannel customer support offered by a team of experts”, said Remessa Online’s co-founder and strategy director Alexandre Liuzzi, in a statement.

Last year, the company expanded its money transfer service to the U.K. and Europe, allowing Brazilians abroad to invest money, pay for education or rent housing without documentation or paperwork. The company’s accounts now come with an International Banking Account Number that allows its customers to receive money in nine currencies.

With the new year, Remessa has added additional services for small and medium-sized businesses and expanded its geographic footprint to include Argentina and Chile.

Latin American countries — especially Brazil — have been hit hard by the COVID-19 pandemic. While much of the economy is still reeling, the broad trends that are moving consumers and businesses to adopt e-commerce and mobile payment solutions are just as pronounced in the region as they are in the U.S., according to investors like Kazah.

“This crisis is accelerating the digitization process of several industries around the world and Remessa Online has taken the lead to transform the cross-border segment in Brazil, specially for SMBs,” he said in a statement.

Founded in 2016 by Fernando Pavani, Alexandre Liuzzi, Stefano Milo and Marcio William, Remessa Online was born from the founders own needs to find an easier way to send and receive money from abroad, according to the company.

In 2018, after a $4 million investment from Global Founders Capital and MAR Ventures, the company developed international processing capabilities and a more robust compliance tool kit to adhere to international anti-money laundering and know your customer standards. In the latter half of 2019, the company entered the SMB market with the launch of a toolkit for businesses that had been typically ignored by larger financial services institutions in Brazil.

“We believe in a world without physical borders. Our mission is to help our clients with their global financial needs, so that they can focus on what matters: their international dreams,” said Liuzzi.

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