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Nuvemshop, an online solutions provider for small companies, raised $500 million in a Series E investment round headed by Tiger Global Management and Insight Partners. The additional funds will be used to expand Nuvemshop’s present markets and expand into new nations such as Colombia, Chile, and Peru.
Nuvemshop, a provider of online tools for SMBs, has raised $500 million in a Series E financing round co-led by Tiger Global Management and Insight Partners. Other participants include Sunley House Capital, VMG Partners, Alkeon, Owl Rock, and existing backers Accel, Kaszek, Kevin Efrusy, Qualcomm Ventures LLC, and ThornTree Capital.
Nuvemshop, which offers Latin American small businesses the tools they need to set up, manage and advertise their internet businesses, now has a market capitalization of $3.1 billion, bringing its total investment in the previous ten months to more than $620 million. The additional funds will be used to expand Nuvemshop’s present markets and expand into new nations, including Colombia, Chile, and Peru.
Nuvemshop will also seek to increase its ability to serve more prominent merchants by hiring more sales and customer service representatives and investing in resources and support for its app partners and agencies. The business also intends to expand its payment and logistics capabilities and put some of the new funds into acquisitions.
Nuvemshop, in Spanish-speaking nations, also known as the Tiendanube, strives to provide a platform for entrepreneurs to start and expand their online enterprises. More than 90,000 merchants use the company’s platform in Brazil, Mexico, and Argentina, including PlayMobil, Billabong, Colombraro, Zaira Beauty, Osram, Lolja, Vitabe, and StrappyCo. This is increased from 20,000 merchants at the beginning of 2020 and 80,000 at the time of the most recent increase in March.
Many merchants and entrepreneurs prefer to create and expand their own online companies rather than sell their items on existing marketplaces such as Mercado Libre, the Brazilian counterpart of Amazon, according to Nuvemshop co-founder and CEO Santiago Sosa.
Santiago said, “Most merchants have entered the internet by selling on marketplaces but we are hearing from newer generations of merchants and SMBs that they don’t want to be intermediated anymore. They want to connect more directly with consumers and convey their own brand, image, and voice.”
Nuvemshop released a test version of its own payments solution platform for merchants earlier this year, intending to make purchases “faster and more secure.” It also represents the Latin American consumer’s long-term payment strategy for retail goods. In fact, according to the firm, 70% of credit card transactions on its network are done in installments. Over the following year, the new product will be made widely available to all retailers.
Nuvemshop claims that its logistical skills enable merchants to deliver directly to customers through partnerships and integrations with a network of carriers that would otherwise be very fragmented. The business intends to continue expanding its warehouse and carrier partners network to reduce the click-to-delivery time in most regions, which is now five to six days, to one or two days, as is normal in the United States.
With 650 million consumers, Latin America is not only a huge market, but it is the fastest growing e-commerce market in the world.Matt Gatto, managing director at Insight Partners
Ethan Choi, a partner at Accel, feels that the Latin American e-commerce industry has the potential to grow to be as large as the US market in the future. He told TechCrunch,
Given the rapid adoption of e-commerce, we believe Nuvemshop has the potential to be one of the most important companies in the region. Looking at Shopify’s $185 billion market cap gives you a sense of what’s possible if you’re the leading e-commerce player in a big market like the U.S.Ethan Choi, a partner at Accel