Argentine e-commerce start-up Tiendanube will use fresh financing to roll out a major expansion across Latin America with an eye to achieve unicorn status in the coming years.
The Buenos Aires-based company raised US$89 million in a Series D funding round led by Accel Partners LP and joined by Thorntree Capital, Qualcomm Ventures and Kaszek Ventures. The investment will be used to expand operations in Mexico and launch in Colombia, Chile and Peru, said co-founder and chief executive officer, Santiago Sosa. It’s the largest investment in the company since a US$30-million round in October.
Tiendanube, which provides a platform for small and medium sellers to launch personalised online stores, tripled its clients in 2020, reaching almost 70,000 between Argentina, Brazil and Mexico. The company, which charges sellers a monthly fee to use the platform and transaction fees, had $690 million worth of transactions in 2020.
“The pandemic accelerated some habits that inevitably were set to change,” Sosa said in an interview. “E-commerce is soon expected to surpass retail sales in China, and Latin America is going to follow that trend.”
Compared to developed economies, Latin America has big potential to keep growing in online shopping. Only 21 percent of the population in Latin America and the Caribbean shopped online in 2019, according to a UN report released last year. The region accounts for 11 percent of the world’s Internet users, the study shows.
Sosa declined to comment on the company’s valuation, but said he sees unicorn status in the near future.
“At the current path of growth, we’re very close to that milestone,” he said. “It could be in 18 months.”
E-commerce giant MercadoLibre Inc, now Latin America’s largest company by market capitalisation, isn’t viewed as a direct competitor, Sosa said. Tiendanube clients use the platform to strengthen their brand, rather than to just sell goods.
In addition to hiring as many as 60 people for its Mexico team, the company will also use the investment to offer more payment and delivery options for sellers in Argentina, something it has already tried with success in Brazil.