São Paulo — Tul, the Colombian e-commerce platform for building materials, has officially started serving Brazilian customers. Iris Freund, Tul’s Head of Marketing in Brazil, told Bloomberg Línea that its app is formally available to shopkeepers in São Paulo now, a few months after the company set up a local distribution center.
In early June, Tul launched operations in beta mode in Brazil, the same month it shut down its activities in Ecuador. At the time, its CEO Enrique Villamarin Lafaurie attributed the move to the new reality “in which it is necessary to seek greater efficiency and focus on other markets to be able to continue”.
“Our guideline is to focus as much effort as possible on retailers. Ecuador’s market, besides being too small a business for Tul, was focused on a channel called the builder channel, where we did not focus exactly on shopkeepers, but rather on the channel to attract large builders. It lost a little of the focus of Tul’s business model,” explained Freund.
Launched in 2020 with a focus on helping the small building material retailer manage their business, Tul operates in Colombia, Mexico (its two largest markets, respectively), and Brazil.
“Brazil has the potential to be our second main market, and even out top location in a very short term. But we know that in the business of startups today you can not go out burning cash, we must have this balance to acquire new customers, but also show a little profitability in the business and sustainability,” said Freund. “Everything is being done very responsibly and very cautiously.”
Tul was valued at $800 million after raising $181 million in a Series B round with 8VC in January this year. Avenir Growth Capital, Coatue, Tiger Global, SoftBank Latin America Fund, Monashees, Lightrock, and Foundamental are also investors in the Bogota startup.
In an interview with Bloomberg News after the Series B, Villamarin said he expected Tul to reach revenue of $450 million by the end of 2022.
The company’s business model is to make inventory available to small building materials retailers in a cheaper way and without supply difficulties, something similar to what Tiger Global’s investee Oico earlier this year proposed to do.
Tul also offers credit for purchases and tool rental, as well as tracking orders.
In Brazil, Tul has 54 employees and 15 indirect hires. The transportation of materials, done with trucks, are outsourced companies. The company continues to bring people to the commercial team.
The platform does not disclose burn rate data, according to Freund, but said that Brazil has an addressable market of 140,000 building material retailers.
Freund explains that in one day the shopkeeper receives the product purchased through e-commerce. “There is an evaluation of the cost of transportation, the balance between how we condense these orders and optimize delivery by region. Everything works as a balance between demand and supply, we need to generate these orders, generate this availability of portfolio and supply and demand so that we do not have the empty output of the trucks, “he said.
By the end of the year, Tul wants to occupy the metropolitan area of Sao Paulo before having national coverage. Between Colombia and Mexico, the company says it has 30,000 customers.