A full-stack, on-demand delivery service operator in Latin America, Merqueo gets funding of $50 million in a Series C round.
IDC Ventures, Digital Bridge, and IDB Invest co-led the round. It also included participation from MGM Innova Group, Celtic House Venture Partners, Palm Drive Capital, and previous shareholders. The financing brings the Bogota, Colombia-based startup’s total raised to $85 million since its 2017 inception.
A little about Merqueo
Merqueo CEO and co-founder Miguel McAllister know a thing or two about the delivery space in Latin America. He also co-founded Domicilios.com, a Latin American food delivery company. Berlin-based Delivery Hero bought it and later merged with Brazil’s iFood.
McAllister describes Merqueo as a “pure-play online supermarket with a fully integrated grocery delivery service”. It sources directly from large brands and local suppliers. Thus bypassing intermediaries and delivering directly from its dark store network. Dark stores are traditional retail stores that have been converted to local fulfillment centers.
Merqueo offers more than 8,000 products, including fresh foods, packaged goods, home essentials, beverages, and frozen products. It currently operates in more than 25 cities in Colombia, Mexico, and Brazil and has over 600,000 users.
What attributes to its success rate?
The startup is close to $100 million in “run-rate revenue,” according to McAllister. Merqueo also reached positive cash flow in Colombia, its most mature market. Over the last year, large Latin American retail chains and retailers have approached the company about potentially acquiring it, McAllister said.
The speed and flexibility it offers might be the reason for the company’s success. Users can choose how and when to receive their groceries. It offers delivery in as little as 10 minutes or three to four hours. Users can also schedule delivery of their groceries in two-hour intervals for the same day or the next day.
What Merqueo plans to do with the gotten funding?
Now that Merqueo has gotten the funding, it plans to use it in part to expand geographically. The company is currently in phase one of its expansion to Brazil, entering initially in Sao Paulo later this month. Next year, it expects to launch in other Brazilian cities such as Rio de Janeiro, Fortaleza, and Salvador de Bahia.
Currently, Merqueo has over 1,300 employees in LatAm, up 60% from last year. It plans to continue hiring with the proceeds from the Series C round as well work “to become the largest and most ambitious dark stores network of Latin America.”
Alejandro Rodríguez, managing partner at IDC Ventures, is naturally bullish on Merqueo’s potential.
From all the opportunities we looked into, Merqueo is undoubtedly the most advanced in the region. … The Merqueo team has proved they know how to scale the business and how to get to profitability.Alejandro Rodríguez, managing partner at IDC Ventures