Mercadoni, a grocery delivery app and service operating in Colombia, Argentina and Mexico, has raised $6.2 million in Series A funding, one of the largest Series A rounds in the region.
The startup lets you order groceries for delivery, in a promised turn-around of under an hour. It already claims 250,000 users and — ready for this — says it’s operationally profitable in the markets it operates in.
“We realised Colombians were spending 4 hours a week buying groceries in very chaotic cities such as Bogota, and we wanted to find a way to give those 4 hours back to people so they could do what’s more important in their lives,” Mercadoni co-founder Pedro Freire tells me. “We deliver their groceries in less than 1 hour, just like magic”.
The company relies on more than 3,000 personal shoppers to deliver its orders in less than 1 hour, while the Mercadoni ́platform is deeply integrated with its more than 100 grocery retail partners, which include some of the largest retailers in the region such as Cencosud, Makro and Walmart.
“I think it’s interesting that given the lower labor costs and the efficiencies we’ve been able to generate, for the first time a grocery startup was able to raise its Series A while generating an operating profit and having 250,000 recurrent customers,” adds Freire.
The key to this, I’m told, is that Mercadoni chose early on to “micro-optimise” the startup’s algorithms, logistics processes, and app interfaces on which its logistic infrastructure runs — the tech promise of all the on-demand delivery companies, which, frankly, hasn’t always translated into the kind of unit economics running a profitable company and investors demand.
Meanwhile, the Colombian grocery market alone is said to be $40 billion, most of which is concentrated in few densely populated cities. “Latin-American cities often have safety issues and chaotic traffic — ranked among the worst in Waze’s world traffic rank — which leads consumers to appreciate home-deliveries more than in other parts of the world,” notes Mercadoni in its press release.
Leading the startup’s Series A round are Axon Partners Group, and Grupo Pegasus. A number of unnamed high profile retail investors also joined the round.