Bloomberg Línea — At only nine months old, Inventa is the second Brazilian startup invested by the renowned U.S. venture capital firm Andreessen Horowitz (a16z). After the unicorn Loft, a16z now joins the regional effort of the Brazil-based Monashees with $20 million invested in the new tech challenger. The round includes other names like Founders Fund, Greenoaks, Greylock, Tiger Global, and angels Hans Tung and Carlos Garcia, CEO of Kavak. Existing investors such as Pear VC, NXTP, ONEVC, MAYA Capital, and Alter Global also participated in the funding.
The startup may be a newcomer, but Inventa’s founder, Spaniard Marcos Salama, is already a familiar name to these funds.
He is a mechanical engineer that worked for engineering and architecture firms before moving to the U.S. for an MBA at Stanford. He also spent time at McKinsey Consulting before helping to build the story of the Colombian delivery behemoth Rappi.
Salama was the global director of groceries at Rappi for four years. After Colombia, he was responsible for opening the company’s operations in Brazil, Chile, Argentina, and Uruguay.
“We have had spectacular growth. I really enjoyed the experience at Rappi and saw that there are many solutions for the end-user. But there are far fewer solutions for small retailers who work with e-commerce,” said Salama, CEO of Inventa.
He says that when he noticed the difficulty for retailers to buy online on platforms such as Amazon, Rappi, and Mercado Libre, he went exploring successful B2B marketplace models in India and Europe. This validated his idea of starting a business - alongside Fernando Carrasco, a specialist in data science, and Laura Camargo, a former General Atlantic investor - betting on this model.
The new business would have to be data-driven to be successful, according to the CEO. Because, in general, retailers buy from suppliers based on the experience of the business owner, and not with data-based information. Another problem is that the small retailer relies on credit for supplier payment terms.
Inventa promises to grant credit to retailers while managing how much the small entrepreneur spends on supplier products and using technology to recommend better products.
In June of last year, Brazil’s cenbank changed the rules for operating the registry and for trading card receivables. This makes it possible for retailers to use card receivables as a form of payment, without having to pay upfront fees. Inventa already offers this payment option on the website through a partner company.
Today, Inventa has a model in which the small shopkeeper enters the platform with pre-approved credit of BRL 1,000 to buy from suppliers. In a scenario of rising interest rates to contain inflation, this helps the shopkeeper to pay suppliers in up to three installments with the Brazilian payment slip (called Boleto), within Inventa’s platform.
The idea, according to Salama, is that the merchant starts paying with the money from the sale of products, which makes a difference in the cash flow.
“Our mission is to solve the lives of small business owners, who have suffered from high-interest rates, and small suppliers. Part of this solution is the management software for inventory, which is free,” explains the founder.
The platform is free for companies that already work with retail and have clients. However, for each new customer the company acquires using the platform, Inventa charges a 15% commission.
The company does not make recommendations for commodity products. The startup’s focus is on the cosmetics and healthy communities segment.
“If I recommend to the retailer that he would have to buy a Coke, he would say he already knew that. But if I tell him he has to buy a specific organic, vegan product that he didn’t even know about, he will buy it. And I have that based on data. It is a much more powerful recommendation. When you think about B2B marketplaces for commodity products, you think much more about efficiency. Whereas when you talk about a marketplace with long-term products, you think much more about data, recommendation, and a technology platform.”
The third generation of founders in Latin America
The startup already has about 20,000 tenants on the platform and 400 suppliers, with 100% month-on-month growth since the launch of the operation in mid-June 2021.
The new round, which came just three months after the last Seed funding, happened because “the market is very large, with gigantic potential,” according to Salama.
VC rounds guarantee capital for those who grow quickly, but, on the other hand, dilute the partners’ participation in the company. Salama did not disclose the composition of Inventa’s board after the contribution. “These funds have a lot of experience in building similar companies, so we don’t just bring capital, but also specific knowledge,” he said.
“Our execution has to be very good. With this round, we will speed up our growth. We want to multiply the company tenfold next year and we are going to use this capital for technology, to hire the best talent in the world and strengthen the sales team.”
Today, Inventa’s team in Brazil has 100 employees. Salama intends to reach 500 by the end of 2022, setting up a consolidated technology team in Brazil to take the first steps to Mexico and Colombia in 2023.
“Latin America has gigantic potential and has very deep problems to solve. If the first generation of founders were from Mercado Libre, in the second generation we had Rappi and Nubank. Now we are having this third generation of people who have talent. I spent four years at Rappi learning, growing from Series A, so I think the talent of the experienced founders in Latin America is ready to receive these investments.”
This article has been updated to better explain how the cenbank’s mandated card receivables rules work, and to say that Inventa already offers this payment option through partners.