Founded by Swedish executive Oskar Hjertonsson and Chilean partners Daniel Undurraga and Juan Pablo Cuevas back in 2015, Cornershop has its sights on becoming the largest on-demand grocery platform in Latin America. Hjertonsson and Undurraga had previously worked for other ecommerce startups in LatAm, including Groupon, the marketplace that offers virtual coupons. Undurraga had previously lived in San Francisco for five years, where he grew fond of the wide-variety of on-demand services. He thought that Latin America needed something alike. Unlike other delivery services though, Cornershop specializes in groceries.
The online and app based platform allows consumers to browse and buy from supermarkets, local shops, independent grocers and specialty stores. Teaming up with personal shoppers, Cornershop allows customers to schedule deliveries up to 60min after the online purchase. The personal shoppers are people recruited through different channels like Facebook ads and referrals from other shoppers. With no specific profile, what the shoppers had in common is that they wanted to work flexible hours. Customers can also buy on demand. From big chains to independent stores, it’s possible to purchase all items one needs in the pantry through the application. Cornershop currently operates in 8 countries across the Americas: Chile, Mexico, Brazil, Peru, Colombia, Costa Rica, Canada, and the US.
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How Cornershop first started
Cornershop first launched its operations in Santiago, Chile. Metropolitan areas served as a perfect canvas for this endeavor. They had consumer interest, dense populations and a good infrastructure to build and scale the business, and, most importantly, make it thrive. Which is not to say it’s been an easy ride. Chile does have its own sets of issues. One of them being online payment methods, which was very poorly developed at the time. Access to capital for such endeavors being another. On the upside, the lack of competition was in their favor. The Chilean market was ready for them. At first they were backed by a seed round led by Mexican-based VC firm ALLVP and other investors, raising $2.5 million in July of 2015. Data from Crunchbase shows that, in November of the same year, the VC fund backed them with a second seed round of $1.5 million. It was also in 2015 that Cornershop went on to operate in Mexico.
When Series A happened, in April of 2016,Cornershop was able to raise a total of $ 6.7 million. The round was led by Jackson Square Ventures and ALLVP. In an interview with LAVCA, Hjertonsson said this particular round was perceived riskier by investors. There was pressure to continue growing, to become economically efficient in their operation, and maintain KPIs as they grew past low volume orders. The team moved to Mexico City in 2016 to supervise the operation. A year later they were already consolidated and the startup was working like clockwork in four Chilean and two Mexican cities. In 2017 Cornershop was delivering more than 1,000 orders a day. They soon became one of the largest delivery services in Latin America. That was also the year when Series B happened, led by California-based firm Accel. By then, Cornershop had shown notable progress on several of the key issues after the first round, granting them the $21 million investment.READ ALSO: Mexican antitrust watchdog approves Uber’s Cornershop acquisition
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In Mexico, they created partnerships with big chains, such as Chedraui Selecto and HEB México, Costco and OfficeMax. Chedraui Selecto, a publicly traded grocery and department store that also operates in California, Arizona, and Nevada under the name El Super, represented 25% of orders in the country. Such a feat was made possible by working together in order to improve the catalogue and increase efficiency. While the stores got a commission on the groceries, Cornershop was able to offer their stores at more competitive prices.
Walmart announced its intentions of acquiring Cornershop in September of 2018 and resell it to its Mexican subsidiary. They proposed a $225 million deal. While the Chilean regulatory body, Fiscalía Nacional Económica (FNE), gave the green light, Mexican antitrust authorities believed it could hinder competition.
Cornershop’s Acquisition by Uber
In October 2019 came the announcement that Uber agreed to acquire the majority of Cornershop for a sum of nearly $450 million. They started operating together less than a year later, in July 2020. Both companies decided to work together, launching an integrated platform allowing users to make their supermarket purchases through Uber and Uber Eats. The supermarket option was first launched in 19 cities across Latin America and Canada. Cornershop chose Dallas and Miami to debut their U.S. operations.
With Uber, Cornershop broadened its presence to 15 Latin American countries, operating in over 1,200 cities. The company is now better capitalized than ever. Plans for this large investment are to open new markets and target large countries, especially the United States and Brazil. In terms of UX, the only noticeable changes will be seen on the Uber app. Users will begin to see a button without making any changes on their data permissions. Those who want to continue to make purchases through the Cornershop app will be able to do so. Charges and currency will change depending on where the user connects from.
In December 2020, Uber received the approval from the Mexican antitrust authorities (COFECE), to go ahead with the transaction with Cornershop Mexico, who up until then was operating independently. Hjertonsson said in an interview with Chilean periodic El Mercurio that he will remain CEO.
With the pandemic shrinking ride-hailing demand and propelling delivery of all sorts, Uber’s groceries and non-food delivery businesses are gaining ground. In Latin America, this is especially related with the completed acquisition of Cornershop in Mexico, as the company stated that it believes this “will accelerate the grocery business there.”