The COVID-19 pandemic has resulted in individuals everywhere going shopping more online and Latin America is no exception.
São Paulo-based Nuvemshop has actually developed an e-commerce platform that intends to enable SMBs and merchants to link more straight with their consumers. With more individuals in Latin America getting used to making purchases digitally, the company has experienced a significant surge in business over the past year.
Need for Nuvemshop’s offering was currently warming up prior to the pandemic. Over the past 12 months, that need has skyrocketed as more merchants have been looking for greater control over their brands.
Instead of offering their items on existing markets (such as Mercado Libre, the Brazilian equivalent of Amazon), numerous merchants and business owners are deciding to begin and grow their own online organizations, according to Nuvemshop co-founder and CEO Santiago Sosa.
“The majority of merchants have actually entered the internet by offering on markets but we are hearing from more recent generations of merchants and SMBs that they do not want to be intermediated any longer,” he said. “They wish to link more directly with customers and communicate their own brand name, image and voice.”
The evidence is in the numbers.
Nuvemshop has seen the number of merchants on its platform rise to nearly 80,000 across Brazil, Argentina and Mexico compared to 20,000 at the start of 2020. These services vary from direct-to-consumer (DTC) upstarts to larger brand names such as PlayMobil, Billabong and Luigi Bosca. Essentially every KPI tripled in the business in 2020 as the world saw a massive transition to online, and Nuvemshop’s platform was house to 14 million deals in 2015, according to Sosa.
“With us, services can find a more extensive environment around payments, logistics, shipping and catalogue/inventory management,” he stated.
Nuvemshop’s quick development caught the attention of Silicon Valley-based Accel. Having just raised $30 million in a Series C round in October and attaining success in 2020, the Nuvemshop group was not looking for more capital.
But Ethan Choi, a partner at Accel, said his firm saw in Nuvemshop the possible to be the market leader, or the “de facto” e-commerce platform, in Latin America.
“Accel has been purchasing e-commerce for a long time. It’s a very essential area for us,” Choi stated. “We saw what they were building and all their capacity. So we pre-emptively asked to let us invest.”
Today, Nuvemshop is revealing that it has actually closed on a $90 million Series D funding led by Accel. ThornTree Capital and returning backers Kaszek, Qualcomm Ventures and others also put cash in the round, which brings Nuvemshop’s overall funding raised given that its 2011 inception to nearly $130 million. The company decreased to expose at what appraisal this newest round was raised however it is noteworthy that its Series D is triple the size of its Series C, raised just over 6 months prior. Sosa stated only that there was a “considerable boost” in appraisal considering that its Series C.
Nuvemshop is relying on the reality that the density of SMBs in Latin America is higher in a lot of Latin American nations compared to the U.S. On top of that, the $85 billion e-commerce market in Latin America is growing rapidly with projections of it reaching $116.2 billion in 2023.
“In Brazil, it grew 40% in 2015 but is still underpenetrated, representing less than 10% of retail sales. In Latin America as an entire, penetration is somewhere between 5 and 10%,” Sosa stated.