Business

On-demand grocery delivery app Merqueo debuts in Brazil and expects to invest $20 million in the first year of operation

The Colombian startup makes its second expansion in Latin America, after arriving in Mexico last year

Miguel McAllister, CEO, and co-founder of Merqueo. Photo: Courtesy/Merqueo
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  • Brazil is the startup’s third market;
  • Merqueo does not act as an intermediary and manages the entire delivery chain.

Colombian on-demand grocery delivery app Merqueo has announced its arrival in Brazil and will invest $20 million in the first year of operation in the country. The funds will be used for a distribution center, which already exists in São Paulo, and complementary expansion with dark stores to support the distribution chain, and product delivery in the São Paulo region.

Giselle Tachinardi, Marketing & Growth director at Merqueo, told LABS that the investment amount for the next 12 months comes from previous rounds, and new investments. The company announced it has $50 million in a Series C round co-led by IDC Ventures, Digital Bridge and IDB Invest, first noticed TechCrunch.

READ ALSO: Home grocery delivery wars heat up in Latin America

Brazil is the third market for the startup, which expanded into Mexico a year ago, where it saw sales grow sevenfold in 2021 alone.

“After more than four years of successful operations in Colombia, where Merqueo was founded and is a leader in the online supermarket category, and a year of important growth in Mexico, the company realized the opportunity to enter and grow in the Brazilian market, Latin America’s largest economy, which presents great potential for the online supermarket sector. To do so, Merqueo bets on its unique business model in the sector, as a pure player, that is, with full control of the end-to-end operations (from App development to distribution and delivery logistics),” said Tachinardi.

Groceries delivery gained greater visibility during the COVID-19 pandemic in Brazil, and is a sector where competition comes from traditional groups such as GPA and Carrefour to e-commerces such as B2W, Magazine Luiza, and delivery apps such as Rappi, iFood, and Uber Eats. Merqueo’s strategy in front of the crowded market is in “competitive prices and quality deliveries and products”, since Merqueo is not an intermediary, but works with the whole chain, from the purchase with producers, the stock, and the last-mile delivery.

READ ALSO: MUY arrives in São Paulo and sets its heart on reshaping how Latin Americans relate to food

The app started operating in São Paulo and the metropolitan region with Ultra delivery, within 15 minutes, Express, within 60 minutes and scheduled deliveries. The app will have more than 4,000 products from vegetables, essential pantry items, dairy, meats, hygiene, and home care products. Payment for purchases can be made through the app or at the delivery with a POS (debit, credit) or cash.

Miguel McAllister is CEO and co-founded Merqueo with well-known Colombian delivery entrepreneur José Calderón in 2017. They also founded Domicilios.com, which was sold to iFood, and RobinFood (ex-MUY), created in 2018, which McAllister follows as a board member. Both Domicilios.com and Merqueo are companies valued at more than US$100 million.

McAllister says that today Merqueo covers half of São Paulo, but the idea is to expand the delivery distribution in the coming months. “The Brazilian online grocery sector has great potential: currently, only 1% of supermarket purchases are made online. We want to be category leaders in the next few years and hope to sell $1 billion in the next four years,” he said.

Unlike some competitors, Merqueo’s app has proprietary technology, which guarantees visibility of product stock in real-time, without eventual exchanges of missing items.

“We are very excited to start our operations in Brazil, where we have high expectations, both in terms of investment and growth. We want to democratize the best online supermarket experience for Brazilian consumers. The fact that we have full control, from purchasing, warehousing, technology, and delivery allows us to offer very competitive prices and aggressive offers every day with a high-quality service,” says McAllister.

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