RIO DE JANEIRO, BRAZIL – Nuvemshop is the leading e-commerce platform in Latin America. With more than 90,000 active stores, it integrates products, payments, and shipping with different sales channels such as Facebook, Instagram, marketplaces, and physical stores.
The Buenos Aires-born but São Paulo-based company has received US$500 million (R$2.6 billion) in a funding round led by Insight Partners and Tiger Global Management.
With this investment, the startup becomes another Brazilian unicorn. Put another way, Nuvemshop is the first binational unicorn in Latin America having roots in Argentina and Brazil.
The company’s market value is now US$3.1 billion (R$16 billion). Unicorns are startups valued at more than US$1 billion.
The new unicorn helps small and medium-sized retailers (SMEs) create and manage online stores. They pay monthly fees starting at US$49.90 and fees for sales in exchange for websites with their brands ready to sell online, with management and marketing solutions.
With the advance of e-commerce and the fact that only 2% of SMEs have a presence online, Santiago Sosa’s startup caught the market’s attention. This is the fifth round of financing that has gone to the company. The last round took place just five months ago and brought the startup US$90 million.
With more money in its pocket, Nuvemshop will attack several fronts at once. Increasing the number of tools on the platform, international expansion, acquisitions, and improving services for SMEs are on the list for the next few years. Yes, “years,” because Sosa said the company “won’t take money to accelerate just five or six months.”
APP STORE FOR SMALL BUSINESS OWNERS
Nuvemshop started as a website creation tool for small business owners and gradually expanded its features to include online stores. Today, the startup has an app store (similar to smartphone stores) with programs that help retailers with checkout, payments, logistics management, marketing strategy automation, and inventory management.
“Any developer can come to the cloud and launch applications that run on our platform,” explains Santiago Sosa. “We are following a similar strategy to the smartphone app stores.”
The cloud ecosystem today includes 300 connected applications. Customers can purchase the programs to use logistics, cash management, customer service, and payments. The platform also has more than 1,000 affiliated marketing agencies that provide communication and sales promotion services.
The CEO of Nuvemshop assured that it is “no secret” to continue attracting partners to the platform. The company must identify the needs of retailers to enrich its ecosystem.
All of these service improvements are also aimed at attracting bigger fish to the platform. As Nuvemshop became a unicorn, the stores in its ecosystem also gained scale. Now they need a differentiated service compared to store owners with lower sales volumes.
“Everything related to management is changing drastically. Small businesses can solve problems manually, while mid-sized businesses that ship up to 1,500 orders per month need automation and ease,” Sosa explains.
If the company can attract more mid-sized customers not on the platform today, the cloud business can grow significantly. In the first half of this year, stores connected to the startup’s platform generated R$2.6 billion in the three countries where the company operates. By capturing larger store owners, this indicator should still have plenty of room for growth.
To serve this audience, the new unicorn has launched Nuvemshop Empresarial, a plan with a more sophisticated service designed to appeal to store owners with higher sales. “The program was born from the need to accompany our customers for life.”
With a full vault, the new unicorn isn’t hiding that it needs to make acquisitions to grow its ecosystem. Fintechs could be on the radar, as the company has expressed a desire to develop its own financial solutions, but no announcement has been made yet.
EXPANSION
As of today, most of its employees, billers, and customers are in Brazil. Argentina and Mexico are also markets where the company is already present. Therefore, expansion beyond national borders is not news to them.
With the financial injection of R$2.6 billion, Nuvemshop now has its sights set on three countries: the company will start operating in Colombia and Chile before the end of 2021 and in Peru starting next year.
To reach other American countries, the e-commerce startup will maintain its strategy of hiring local professionals, as it did in Brazil and Mexico.
NUVEMSHOP STORY
The company was founded in late 2010 in Buenos Aires by Santiago Sosa, José Abuchaem, Martín Palombo and Alejandro Alfonso as Tienda Nube. This is the name of the company in Spanish-speaking Latin American countries, currently spelled Tiendanube.
In 2011, the partners began studying Portuguese to prepare for entry into Brazil. In 2012, the company arrived in Brazil under the name Nuvem Shop (currently spelled Nuvemshop). Despite being originally Argentinian, the focus of the business shifted to Brazil.
In 2013, Nuvemshop received a financial contribution from Trindade Investimentos worth over R$2 million. In 2017 came a larger contribution of US$7 million (about R$24 million at the time). The investment was made by Elevar Equity, IGNIA Partners, Kaszek Ventures, NXTP Labs, and FJ Labs.
In 2020, the largest investment in the company’s history was made by Kaszek Ventures, the same company behind capital applications in Nubank and QuintoAndar, and Qualcomm Ventures, which has made investments in other startups like 99 and Loggi.
The value of the investment in Nuvemshop was US$30 million, driven by the e-commerce boom during the new coronavirus pandemic.
Thanks to its technology, Nuvemshop adapts to each type of business in different ways, allowing the layout of the stores to be unique and giving the possibility of installing applications and integrating custom development. All this is done with the accompaniment of an excellent customer service team.