Uruguayan e-commerce startup Tiendamia has raised $30 million in a Series B round led by Cartesian Capital Group. Under the deal, the US fund is now committing $20 million, plus another $10 million to the startup, lifting the company’s valuation to $80 million.
This is the second time the marketplace receives investments. The first round took place in 2016 when it secured $1.8 million. Since then, Tiendamia has sustained itself with its own resources.
The new fundraising fuels the expansion of the company. Last year, the startup had a goal of five-fold its revenue, which was not achieved. “We came very close but we took a break,” explains Michele Chahin, country manager of Tiendamia in Brazil. The company did not yet know whether it would receive the investment in 2022 or work with income from established markets.
Tiendamia has been in Brazil since 2018 but still operates in a soft launch. Counting the operations in Latin America, the startup distributes in its marketplace more than 1 billion products from the United States that come from shops like Amazon, eBay, Macy’s, and Walmart. It is a bet on cross-border e-commerce, in which the company guarantees delivery in up to 20 days to capital cities.
For this year, Tiendamia is focused on reaching a growth of 500% by December. “I believe we can even exceed that, depending on the strategy we take and how much of that amount will be destined for Brazil,” she said.
The Series B will be used to expand the platform with launches in new countries. Today Tiendamia is present in Uruguay, Argentina, Ecuador, Brazil, Costa Rica, and Peru. Although the company wants to expand operations in the region, it is also studying other markets such as Africa and the Middle East.
The resource will also be invested in the user experience in the markets where the company already operates, as well as partnerships with new retailers within the marketplace, bringing a larger catalog of products.
In Uruguay, Tiendamia is well-positioned as e-commerce that competes on head-to-head with local e-commerces, according to Chahin. But in Brazil, as the competition in e-commerce is steep, the quantity of products on offer means the startup can’t position itself for the best price. Subject to the variation of the dollar over the Brazilian currency, the company brings products “that would not be found in Brazil” to win the customer, as explained by the country manager.
The e-commerce market in Brazil and Mexico is expected to grow about 30% per year until 2025, as pointed out in an annual study by Brazilian payments company Ebanx. According to the report, Mercado Libre is responsible for most of the online e-commerce traffic in the region, followed by OLX, Americanas, Amazon, and Magazine Luiza.
Local companies also battle for the more than 100 million e-commerce consumers in Brazil with large foreigners such as Shopee, from Singapore, and AliExpress, from China, which offer both international and local products.
Thus, Tiendamia’s Brazilian strategy is focused on specific niches, such as sports, board games, and collectible dolls. “We want to take advantage that the niche communities in Brazil are very big to enter this place of products that are not sold in Brazil. What can’t I buy or can’t find in Brazil that I only bring from the US? For this channel, Tiendamia is the best option,” she explains.
The startup says it has more than 500,000 customers in the countries where it operates but does not disclose the number of sales for strategic reasons. The company has the largest market share in Uruguay, where it is based.
The marketplace offers up to 12 installment payments and customer service in Latin America by telephone, e-mail, or WhatsApp. Tiendamia also freezes the price of the dollar in the transaction, that is, the customer pays the price of the product on the day of purchase, without being subject to currency fluctuations.
“We know that this political uncertainty [of an election year in Brazil] causes the dollar to vary a lot. The fall and rise of the dollar directly impact our business. That’s why our strategy in Brazil is niched since the price within our platform varies according to the dollar. If the dollar goes up 1%, our price goes up 1%, which greatly impacts our sales.”