Merqueo raises $50 million Series C to expand its full-stack grocery delivery service across Latin America
The company has achieved a dominating position in Colombia, its home market, and has grown its sales by 5x in Mexico in the first half of 2021.
MEXICO CITY, July 30, 2021 /PRNewswire/ -- Merqueo, a full-stack delivery scale-up, landed a $50 million series C round led by IDC Ventures, Digital Bridge and IDB Invest. The company is the first and largest full-stack grocery delivery player in Latin America. By owning and controlling the entire vertical supply chain — relying exclusively on proprietary technology — Merqueo is able to obtain better margins, offer competitive pricing, and achieve healthy unit economics.
The round was also supported by MGM Innova Group, Celtic House Venture Partners, Palm Drive Capital and previous shareholders.
"Merqueo has developed all the attributes and technologies required to operate in a complex market, such as Latin America. Cash acceptance, adaptation of delivery slots and adjusted price are critical variables to consider when scaling startups in the region," says Alejandro Rodríguez, Managing Partner at IDC Ventures. "We are thrilled to support them in capturing the regional eGroceries revolution, which started 18 months ago with GoPuff and Getir, in the US and EU, respectively."
The company plans to use this capital injection to become the largest and most ambitious dark stores network of Latin America. Furthermore, Merqueo is hiring and scaling its team across Mexico, and it launched its operations in Brazil this month.
Its disintermediation-based model and the use of in-house technology reduces the cost of fulfillment, allows for control of the entire customer experience, and makes the service more accessible to a broader number of people, who aren't willing or able to pay for high delivery fees or markups on their products. This offers a window of opportunity to a $700 billion market in Latin America alone. Furthermore, the company already experienced positive cash flow for a few months of 2020.
Even though the full-stack model was pioneered by peers in the US and EU, the market opportunity in Latin America is even larger. In fact, while in China online grocery sales represent 40% of the market, in Latin America, penetration is still only at 1%.
With such growth potential it is not surprising that, during last year, the largest retail chains and retailers of Latin America approached the scale-up with intentions of acquiring the company.
"Merqueo is focused on building a highly scalable platform that can deliver great service at the best price. Once we proved our model, we looked for investors to continue our expansion across the region," states Miguel Mc Allister, CEO and co-founder of Merqueo.
"Our technology and operational model allow us to offer great service and deliver faster and cheaper as we grow our network. In fact, our new Ultra delivery service allows us to deliver orders within just 15 minutes."
Miguel, an industry expert, also co-founded Domicilios.com, one of Latin America's most successful food delivery companies, bought by Delivery Hero in 2017, from which he got the know-how and industry experience.
About Merqueo
Merqueo is building the largest dark store logistics network in Latin America to deliver groceries faster and cheaper. Its catalog encompasses up to 10,000 products including fresh fruits and vegetables, imported products, liquors, household items, personal care goods, and more. Currently, the company operates in Mexico, Colombia and Brazil.
About IDC Ventures
IDC Ventures is an investment fund that finances projects that drive innovation and digital disruption. IDC Ventures focuses on companies in the fintech industry, marketplace and platforms throughout Europe, the US and Latin America. To date, it has raised more than $400 million dollars for technology companies and supported projects such as Bipi, RecargaPay, Securitize and more.
About IDB Invest
IDB Invest, a member of the IDB Group, is a multilateral development bank committed to promoting the economic development of its member countries in Latin America and the Caribbean through the private sector. IDB Invest finances sustainable companies and projects to achieve financial results and maximize economic, social and environmental development in the region. With a portfolio of $13.1 billion in assets under management and 385 clients in 26 countries, IDB Invest provides innovative financial solutions and advisory services that meet the needs of its clients in a variety of industries.
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