Miami — Corner stores play an integral role in neighborhoods in Latin America. For many, it’s where they go to buy their daily goods from milk to toilet paper. But for shop owners, who often run these businesses alone, keeping everything in stock and making buying trips can be a struggle. Global investors are betting that Chiper, which today announced the close of a $53 million Series B round of funding led by Tiger Global and Nosara Capital, can digitize the buying process by growing an e-commerce for corner store owners in LatAm.
The company has raised a total of $78 million to date, and other participants in this round include Endeavor Catalyst, inQlab, Alter Global, and Interplay.
“It’s a very tough business, and a very tough life, because you’re [corner stores] open from 8am to 8pm everyday, even on Sundays, and you’re responsible for everything to do with the store from cleaning to restocking,” said Jose Bonilla, co-founder and CEO of Chiper.
Chiper allows its merchants - of which they have 40,000 in Mexico and Colombia, where they are based - to pick from 3000 items online and get them delivered next day.
“It’s an e-commerce app just like Amazon, but for them,” Bonilla said.
Because merchants can get goods delivered in a day, they don’t need to plan their buys so long in advance, and also don’t need to keep so many items in stock. Bonilla said this allows them to free up cash which would normally be tied up in inventory.
According to Chiper, there are about 3.7 million corner stores in Latin America, so right now they only have about 1% of the market, meaning there is a ton of room for growth and a lot of ground to cover.
The company makes money by charging a 12% mark-up on each good sold, and they can ensure next day delivery because they own all the inventory themselves. In the last 12 months, Bonilla said, the company’s revenue has grown from $1M-$7M.
The company launched in Colombia in 2018, expanded to Mexico in 2019, and is in pre-launch mode in Brazil, which it expects to launch in early 2022. One of the factors that’s different between the Spanish speaking countries and Brazil, in addition to the language, of course, is that the Mexican and Colombian corner stores mostly accept only cash, while those in Brazil have point of sale systems that accept credit cards, too.
“In Mexico and Colombia, 98% of the businesses are cash only, so it’s difficult for companies to provide services to them because no one knows who they are,” Bonilla said.
As Chiper onboards these companies today to offer them the e-commerce platform, the company is also thinking about what other tech products it can offer in the future, namely in the financial services sector, though the company didn’t specify which ones. “Right now we’re in the discovery phase,” he said.
With the money from this round, the company plans to expand to Brazil, hire 200 engineers, determine their next service offerings, add an additional 2000 products to their e-commerce catalog, and launch 1-hr delivery.
Before launching Chiper, Bonilla was the CEO of a development shop in Colombia called Imaginamos. His business partner, he said, was Símon Borrero, co-founder and CEO of Rappi. The company, which still exists today, has worked on about 7,000 tech projects from all over the world, and Chiper was one of them. “It was just a small project for one wholesaler, but other wholesalers asked to start using it, and other merchants, too - and that never happens. That’s how we knew there was something there,” he said.