São Paulo — Brazil-based unicorn MadeiraMadeira announced on Tuesday the acquisition of the Brazilian operation of the service platform IguanaFix. The value of the transaction was not disclosed. The startup, of Argentine origin, connects home service providers with customers. The company’s operations in Argentina and Mexico will remain separate, but in Brazil, IguanaFix will be 100% owned by MadeiraMadeira, where it will work exclusively with furniture assembly.
This is MadeiraMadeira’s second acquisition since it became a unicorn in 2021 - the company bought the iTrack tracking startup -, after a $190 million round from SoftBank with Dynamo. According to CFO Carlos Eduardo Baron, MadeiraMadeira still has cash on hand from the contribution to make the acquisition, as the company is sustainable because of its dropshipping business model, and low cost compared to traditional retailers.
Founded in 2013, IguanaFix has Brazil as its main market and has performed more than 40,000 appointments per month with more than 20,000 professionals registered on the platform. The company has received investments from Temasek, Qualcomm Ventures, Riverwood, AVM, and Endeavor. “They did several services for home in general, but the main one was furniture assembly. It was an old pain of our clients, we were studying and trying to talk to some companies, but none had a model with technology that could be scaled with quality. We wanted to guarantee the quality of the assembly”, said CFO Carlos Eduardo Baron, in an interview with Bloomberg Línea.
Focused on furniture and decoration, in 2018 MadeiraMadeira launched its 3P (third-party seller) marketplace, in which the company hosts several brands. In 2019, the startup launched its own “in-house” logistics company, Bulky Log, as it had difficulty finding a 100% furniture-focused logistics company on the market, as Baron recounted.
In 2020, MadeiraMadeira went after the “showroom” shop model to enter physical retail, and this year the company launched a Technology Centre to design furniture with its own brand. “We have been building this ecosystem to serve the customer better and better and IguanaFix comes to supply the need for assembly service,” said Baron.
Now, in addition to design and logistics, the marketplace offers the assembly of the furniture. “The assembler today has an app for each of the self-employed professionals, with all the description of the service he is going to provide, the address, what the product is and what type of tool he has to bring. When he arrives at the address, he takes photos of all the stages of the process to ensure that the service was done correctly. It is a very robust system for us to scale with the capillarity that MadeiraMadeira has in its business, practically all over Brazil”, said the executive.
MadeiraMadeira operated a pilot for three months with IguanaFix in São Paulo with assembly for clients. Over one thousand assemblies were completed in 90 days with an NPS (net promoting score) of over 90, which provided the security to close the deal, according to the CFO.
Now, the company will gradually begin to expand the offer of assembly service to the rest of the country. It will work like this: the client buys the assembly service and MadeiraMadeira will be in charge of finding the professional and scheduling the service. MadeiraMadeira charges the client for this service and passes a portion to the professional. “IguanaFix has a pricing technology. The algorithm evaluates the size of the furniture, weight, complexity, and comes up with a price that makes sense.”
Now, the company will be a service unit of MadeiraMadeira. According to the innovation platform Sling Hub, in March, Brazilian companies made 23 acquisitions. Baron says MadeiraMadeira sees M&A as a way to complement the business, but it is not something the company is “rushing to do”.
“We look at businesses that are complementary and possibly other services, brands in which we do not have a market share”, he pointed out.