Reduce intermediaries and connect producers of fruits, vegetables, and legumes directly to the consumer. That’s the purpose of Lomi, a Chilean startup founded last year amid the COVID-19 pandemic, which raised an $850,000 investment round on Thursday with the U.S.-based fund ASAP and undisclosed Chilean angel investors.
Lomi will use the round for expanding its dark store operations in Chile, besides technology development and marketing. Founded in August 2020, Lomi (an acronym for Local Market Integration) surfed the e-commerce wave amid the pandemic to address an important issue. In the startup‘s virtual showcase, users can buy fruits, vegetables, snacks, dairy products, and meat – since its foundation, more than 100,000 users have visited Lomi’s website. The company already serves most neighborhoods in the capital Santiago and will soon expand to one or two more areas of the country, according to Francisco Leitao, co-founder of the startup.
Leitao tells LABS that Lomi wants to support mainly small producers. “We believe that nowadays people want to eat healthily, they want to consume an organic product and help the ecosystem somehow. When the pandemic took place, we saw those producers had difficulty delivering their products to users. They had to knock from door to door every day. So we decided to create a Mercado Libre-alike marketplace to bring together the supply of small, local, and organic producers.”
Lomi’s potential market is not small. Leitao says that there are about 300,000 producers in Chile alone, 93% of which are small. “We wanted to create an ecosystem where these producers could deliver, in a few clicks, what users want: to eat better and help the planet with technology.”
How Lomi works
The startup has more than 1,600 local producers and more than 1,500 products from over 25 categories available on the platform. The products arrive at Lomi’s dark store, which integrates the user request to last-mile delivery services such as Cabify and Pedidos Ya. The product arrives to the user within 30 to 60 minutes, depending on the region of Santiago. “When you enter the website, you don’t see just the product, but also the whole story behind the small farmer.”
Today, the startup has more than 2,000 monthly sales. Users have bought more than 5,000 products in less than nine months of operation. In April alone, the startup received about 2,000 orders and grossed approximately $100,000. “We have an exponential curve [of weekly sales] in Lomi today,” says Leitao.
To offer products on the marketplace, producers can register through Lomi’s website or send an e-mail to [email protected]. “We buy the products with fair margins for both parties,” says Leitao, without specifying percentages.
In November 2020, the startup received a $160,000 round raised via Chilean crowdfunding Broota. The money was invested in the platform’s first dark store. A few months later, in March of this year, Lomi received a $400,000 investment from the same investors that made the latest round.
The startup plans to expand to other countries, starting with Mexico, and it is evaluating an entry into Florida (United States), Colombia, Peru, and others. “People are expecting platforms to bring them closer to their goals of eating better, of taking care of the ecosystem. It is not by chance that there are protests in much of the world, a discontent of people with the way we live today. People have been asking us if we can expand to other countries and other regions in Chile. We definitely want to accelerate that because we believe there is an opportunity for producers to get to those places quickly.”
Expansion to other markets should happen in the last quarter of this year or the first half of 2022. To this end, Lomi is planning a Series A round in the coming months. “When you have a curve with exponential growth, the problem is that if you don’t have the money to expand and acquire new users, you can lose customers.”
Investor interest in business models capable of connecting producers and end-users in Latin America‘s food sector seems to be growing. Last Wednesday, Colombian startup Frubana, which works similarly to Lomi but with bars and restaurants as its end-customers, raised a $65 million round to finance its expansion in Latin America. The round included Hans Tung and venture capital funds GGV Capital, Tiger Global, SoftBank, monashees, and Lightspeed Venture.