Nuvemshop, LatAm’s answer to Shopify, raises $90M in Accel-led Series D – TechCrunch


The COVID-19 pandemic has led to individuals all over the place purchasing extra on-line and Latin America is not any exception.

São Paulo-based Nuvemshop has developed an e-commerce platform that goals to enable SMBs and retailers to join extra straight with their shoppers. With extra individuals in Latin America getting used to making purchases digitally, the corporate has skilled a significant surge in enterprise over the previous yr.

Demand for Nuvemshop’s providing was already heating up prior to the pandemic. But over the previous 12 months, that demand has skyrocketed as extra retailers have been searching for larger management over their manufacturers.

Rather than promoting their items on current marketplaces (reminiscent of Mercado Libre, the Brazilian equal of Amazon), many retailers and entrepreneurs are opting to begin and develop their very own on-line companies, in accordance to Nuvemshop co-founder and CEO Santiago Sosa.

“Most merchants have entered the internet by selling on marketplaces but we are hearing from newer generations of merchants and SMBs that they don’t want to be intermediated anymore,” he mentioned. “They want to connect more directly with consumers and convey their own brand, image and voice.”

The proof is in the numbers.

Nuvemshop has seen the variety of retailers on its platform surge to almost 80,000 throughout Brazil, Argentina and Mexico in contrast to 20,000 initially of 2020. These companies vary from direct-to-consumer (DTC) upstarts to bigger manufacturers reminiscent of PlayMobil, Billabong and Luigi Bosca. Virtually each KPI tripled in the corporate in 2020 because the world noticed an enormous transition to on-line, and Nuvemshop’s platform was residence to 14 million transactions final yr, in accordance to Sosa.

“With us, businesses can find a more comprehensive ecosystem around payments, logistics, shipping and catalogue/inventory management,” he mentioned.

Nuvemshop’s fast progress caught the eye of Silicon Valley-based Accel. Having simply raised $30 million in a Series C spherical in October and attaining profitability in 2020, the Nuvemshop staff was not on the lookout for extra capital.

But Ethan Choi, a accomplice at Accel, mentioned his agency noticed in Nuvemshop the potential to be the market chief, or the “de facto” e-commerce platform, in Latin America.

“Accel has been investing in e-commerce for a very long time. It’s a very important area for us,” Choi mentioned. “We saw what they were building and all their potential. So we pre-emptively asked them to let us invest.”

Today, Nuvemshop is saying that it has closed on a $90 million Series D funding led by Accel. ThornTree Capital and returning backers Kaszek, Qualcomm Ventures and others additionally put cash in the spherical, which brings Nuvemshop’s complete funding raised since its 2011 inception to almost $130 million. The firm declined to reveal at what valuation this newest spherical was raised however it’s notable that its Series D is triple the scale of its Series C, raised simply over six months prior. Sosa mentioned solely that there was a “substantial increase” in valuation since its Series C.

Nuvemshop is banking on the truth that the density of SMBs in Latin America is greater in most Latin American nations in contrast to the U.S. On prime of that, the $85 billion e-commerce market in Latin America is rising quickly with projections of it reaching $116.2 billion in 2023.

“In Brazil, it grew 40% last year but is still underpenetrated, representing less than 10% of retail sales. In Latin America as a whole, penetration is somewhere between 5 and 10%,” Sosa mentioned.

Nuvemshop co-founder and CEO Santiago Sosa;
Image courtesy of Nuvemshop

Last yr, the corporate transitioned from a closed product to a platform that’s open to everybody from third events, builders, companies and different SaaS distributors. Through Nuvemshop’s APIs, all these third events can join their apps into Nuvemshop’s platform.

“Our platform becomes much more powerful, vendors are generating more revenue and merchants have more options,” Sosa instructed TechCrunch. “So everyone wins.” Currently, Nuvemshop has about 150 purposes publishing on its ecosystem, which he tasks will greater than triple over the subsequent 12 to 18 months.

As for comparisons to Shopify, Sosa mentioned the corporate doesn’t essentially make them however believes they’re “fair.”

To Choi, there are various similarities.

“We saw Amazon get to really big scale in the U.S.. Merchants also found tools to build their own presence. This birthed Shopify, which today is worth $160 billion. Both companies saw their market caps quadruple during the pandemic,” he mentioned. “Now we’re seeing the same dynamics in LatAm…Our bet here is that this company and business has all the same dynamics and the same really powerful tailwinds.”

For Accel accomplice Andrew Braccia, Nuvemshop has a transparent first mover benefit.

Over the past decade, direct-to-consumer has become one of the most important drivers of entrepreneurship globally,” he mentioned. “Latin America is no exception to this trend, and we believe that Nuvemshop has the level of sophistication and ability to understand all that change and fuel the continued transformation of commerce from offline to online.”

Looking forward, Sosa expects Nuvemshop will use its new capital to considerably make investments in: persevering with to open its APIs; funds processing and monetary providers; “everything related to logistics and logistics management” and attracting smaller retailers. It additionally plans to increase into different markets reminiscent of Colombia, Chile and Peru over the subsequent 18-24 months. Nuvemshop at present operates in Mexico, Brazil and Argentina.

“While the countries share the same secular trends and product experience, they have very different market dynamics,” Sosa mentioned. “This requires an on the ground local knowledge to make it all work. Separate markets require distinct knowledge. That makes this a more complicated opportunity, but one that enables a long-term competitive advantage.”

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