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.
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.
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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.
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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.
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