Brazil's ZAX raises BRL 32 million to connect apparel wholesalers and retailers through a marketplace

The startup's third round was led by the venture capital fund Atlantico and will be used to expand ZAX's reach and portfolio of financial services

Fernando Zanatta and Bruno Ballardie, founders of ZAX. Photo: Courtesy.
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To connect 2.5 million stores and more than 1 million independent sellers to thousands of wholesalers who sell clothes, shoes, and accessories in Brazil. That’s how ZAX‘s business started, in 2019, and grew (a lot) during 2020 and 2021, to the point of drawing the attention of investors to a new round. The marketplace announced this Tuesday a collection of BRL 32 million ($5.86 million) led by the VC fund Atlantico.

In addition to Atlantico, FJ Labs, Caravela Capital, GFC, and Canary participated in the round — these last two VC firms led, respectively, the first two investment rounds at ZAX. In total, the startup has already raised BRL 43 million ($7.9 million) in investments.

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“In Brazil, there are millions of stores and sellers that depend on decentralized physical commerce and have difficulty accessing working capital,” explains the CEO, Bruno Ballardie, co-founder of the platform alongside Fernando Zanatta, CTO at ZAX. “Through technology, ZAX brings solutions to these people. Resellers save time and resources by no longer having to travel and have access to hundreds of suppliers on the same platform, so they can compare prices and choose the best option. For wholesalers, it is a very practical way to increase visibility and demand as well. Through the platform, they can prospect new clients from different regions of the country, who might never have accessed their business.”

The platform, which can be accessed by mobile devices, has more than 700 providers. Through it, shopkeepers choose which type of shipping they prefer — within options quoted with ZAX’s logistics partners. They can also pick up the merchandise directly from a supplier’s store. It is also via the platform that the payment option is defined: in up to six installments on the credit card, PIX (Brazil‘s new instant payments system), boleto (a type of cash voucher), transfer, or deposit.

By the end of the year, the startup wants to increase its workforce (now at 40 people) and expand the range of its financial services. ZAX began offering 30-day working capital for shopkeepers and payment solutions at the points of sale. The offer of a digital wallet is on the startup‘s radar. In terms of reach, Ballardie told LABS that the startup is eyeing strategic hubs for the apparel industry in Brazil besides Sao Paulo state, where it operates.

As in many other sectors, the COVID-19 pandemic has speeded up digitization for B2B business too. The startup claims to have grown 10 times during the pandemic. During this period, it raised an investment round led by Canary. “The founders’ previous experiences impressed us a lot. Both Bruno and Fernando have the technical and business knowledge to build a super relevant B2B marketplace, capable of tackling [the pains of] a huge sector that drives the Brazilian economy but still lacks the technology [to be digitized],” says Canary managing partner, Marcos Toledo.

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Although focused on the apparel industry, the startup started to work with other types of merchandise in 2020, such as electronics, toys, and beauty products. Its performance attracted the attention of investors for a new round and, in September this year, Atlantico, Canary’s sister fund, led BRL 3.2 million investment in ZAX.

“ZAX is a startup that has shown excellent strength in a short period. The market potential is enormous not only in Brazil but throughout Latin America, where many wholesalers and retailers can greatly evolve their business through technology,” says Julio Vasconcellos, managing partner of Atlantico.

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