Favo, a Brazilian-Peruvian social commerce platform, secured $26.5 million in Series A round led by venture capital Tiger Global and followed by Global Founders Capital, MSA Capital, Elevar Equity, Positive Ventures, FJ Labs, H2O, and David Vélez, Nubank’s CEO and founder.
Founded in 2019 in Peru by Alejandro Ponce and Marina Proença, Favo landed in Brazil in February 2020. The startup focuses on the community group buying concept, an e-commerce model based on micro-locations, in which entrepreneurial partners make purchases through social networks. Through its platform, Favo connects community-leading entrepreneurs to end consumers.
READ ALSO: Gabriel raises BRL 66 million from SoftBank to expand network of smart security cameras
By registering as a seller on Favo’s platform, partners have access to a personalized online store that offers the entire Favo’s product catalog, which today consists of more than 2,500 retail items at reduced prices.
It is up to each partner to promote their online store and sell to their community – the most common way is through social networks like WhatsApp or Facebook. The products are stored in the startup‘s own distribution centers. Delivery is made directly to the homes of registered sellers within 24 hours.
READ ALSO: In-car media startup Zanzar receives funding and partners with Kovi
Imagine community leaders sharing their online stores’ links to their neighbors; these communities adhere and start shopping through the platform (there is no minimum order nor delivery fees). In the end, for each sale, the virtual store’s “owner” receives a commission.
“Favo was born to transform groceries’ shopping into an easier and cheaper task. And this only succeeds through a neighborhood partnership, in which the neighbors unite to buy and generate income for those in need. It is a possibility for anyone, no matter their training or economic class, to have an activity and remuneration,” Favo’s co-founder Marina Proença told LABS in a recent interview.
READ ALSO: iClubs raises BRL 5 million from BTG Pactual to disrupt loyalty programs
The startup currently operates in the metropolitan region of São Paulo city and in the Peruvian capital Lima, and has become a source of income for about 10,000 partner sellers. According to Favo, the platform has already delivered over 700,000 parcels for them since February last year and already has about 160,000 buyers.
The newly raised capital will be invested in logistics and expansion to other cities – Favo is expected to reach at least 20 cities in the coming months and start operating in Mexico as well.