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LatAm’s Cubbo Acquires Competitor Dedalog to Launch in Brazil

DedaLog’s CEO will run Cubbo’s e-commerce fulfillment operation in Brazil

Cubbo founders, Josu Gurtubay and Brian York
March 07, 2022 | 09:37 am

São Paulo — After raising a $4 million Seed in November, Cubbo, an e-commerce fulfillment platform that operates in Mexico and Colombia, is acquiring DedaLog, a São Paulo-based e-commerce fulfillment startup. The company doesn’t disclose the amount of the transaction but said the deal was a mix of cash and equity.

Featured on Shark Tank Colombia, Cubbo facilitates local and international brands to sell products directly to their consumers, handling packing and shipment of goods for independent brands. The startup stores the goods in its warehouses and items can be delivered within the same day.

Brian York, co-founder, and CEO at Cubbo is a serial entrepreneur. Born in Bogota, but raised in the U.S., York came back to Colombia in 2017 to look for his biological family – and found them after 18 months of searching - and in the meantime, he ended up creating Liftit, a truck delivery platform.

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He founded Cubbo in 2021. The startup is backed by San Francisco’s SV Latam Capital and works with shipments that are non-perishable and not bigger than a shoebox. Now, with his family, York is moving to São Paulo to co-run Brazil’s operation with Tiago Pavan, founder, and CEO of DedaLog.

“I always want to see which companies are similar to the company I’m building”, York said. It was like this he got to know Pavan, corresponding him through LinkedIn last year, after the CEO of the Brazilian startup congratulated York on social media when reading Bloomberg Línea’s article about Cubbo’s Seed round.

“I reached out to Brian, publicly on LinkedIn, congratulating him, because I was very excited to see the fulfillment business in Latin America attracting venture capital. That was when we started corresponding and sharing about operations, that led to this agreement,” said Pavan.

York told he was “blown away” with what Pavan’s team was able to achieve. “The more we dig in into DedaLog the more we were like ‘this is a perfect business, very synergetic’. And we wanted to get to Brazil this year,” said the executive.

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DedaLog began operating e-commerce for the book business, with publishers and book subscription clubs that were struggling on delivering their books. “I came from the book business, at a bookstore in Brazil. In this bookstore, from the things that we did, the best was logistics, storage, packing, deciding how to cheaply deliver to the final consumer,” said Pavan.

“We had also this idea to have more people reading in Brazil, the foundation of our business was to provide good logistics to promote the book culture around Brazil.”

The startup had a small warehouse when it began its operation in late 2020. In two months, Pavan said they were over-committed with clients and the company didn’t have any more space left in the warehouse. “In the first few months, we realized we had something like the product-market fit. We decided to open a new warehouse in early 2021, and that new warehouse also achieved full capacity by the end of the year, when we had Black Friday.”

With clients growing month by month, in November DedaLog had a pick of 32,000 shipments in a single month. The company says it can deliver items within a day.

“Brazil is a great market, so much I’m relocating my entire family to the country. We’re super excited to work side by side with Tiago, he will be running the country and I’ll be supporting him and overseeing the rest of Latin America,” said York.

The company has plans to open two new warehouses in São Paulo and one in Rio de Janeiro. “We’re going to be pretty aggressive, we’re raising a new round of funding now, and the majority of the proceeds will be going to expansion in Brazil.”

Another part of the funding to come will go to support and expand Colombia and Mexico’s operations. With DedaLog, Cubbo says it is close to 100 clients. In talks with Bloomberg Línea In November, York said the company would become cash flow positive by the first quarter of 2022, but it didn’t. “Though we were super close to reaching cash flow positive this quarter, the only reason why we didn’t is that we are advancing into Colombia, and expanding in Brazil, making aggressive moves. DedaLog is cash flow positive, as we absorbed, that’s going to be similar to the rest of the business,” said York.

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