B2B Marketplace in Latin America
Challenges and opportunities of this business model in a region with many inefficiencies and a gigantic market.
clique aqui para a versão em português
Challenges and opportunities of this business model in a region with many inefficiencies and a gigantic market.
clique aqui para a versão em português
For many people timing is one of the main reasons for the success of a startup, even though it is something subjective and difficult to have any control over. In a survey of 125 companies in his portfolio, legendary investor Bill Gross, founder of Idealab, found that in 42% of cases the determining factor was: timing.
At Verve Capital, we are confident that this is an opportune time to invest in technology companies in Latin America. The increase in global inflation causes part of the capital that was looking for this type of investment to start looking for other less risky asset classes, which is normal. But regardless of the macroeconomic situation, startups need to keep being “born”. It’s inevitable! The market’s pains are still there. They are many and they are varied. There are still inefficiencies in almost every supply chain, in inter-company relationships, in the logistics chain etc., and we believe that these problems will be solved through the use of technology. The largest Latin American companies are still ‘real economy’ and not technology companies, quite different from more developed regions such as the US and China.
In Verve’s Portfolio, we have some B2B Marketplaces companies and we clearly have an aptitude for this business model. The challenges of entrepreneurship in the territory are enormous, so we believe that Latin America will remain a region of business opportunities for many years to come.
Startups will look for ways to improve the experience for both sides of the Marketplace, where buyer and seller will have to see advantages in transacting through the platform. Increasing buyer credit through the use of data or ensuring more transparency in transactions are examples of direct benefits for both sides. With the use of technology, some tasks that consume a lot of time, for example, are done automatically and in a few seconds, which brings an improvement in the quality of life of the entrepreneur. More time to take care of what is really important for the company and for their lives.
Clicampo, for example, connects rural producers with restaurants and retailers in several cities. Often meaningless logistical bottlenecks cause a disconnect between what small and medium-sized farmers produce and what restaurants and stores offer to the final consumer. This enormous inefficiency, which ends up costing more for the customer and for those who produce, no longer makes sense!
Another B2B Marketplace at an early stage in the portfolio that shows a lot of traction is Sooper, a platform that connects the whole building materials segment in a digital ecosystem, resulting in efficiency mainly in the purchase of stock, deliveries and payments. There are more than 300,000 building materials stores spread across Brazil, a market worth more than U$30 billion per year and still very little digitized.
Through market learning, conversations with early adopters, product development based on the feedback received and staying physically close to industry players, other companies in our portfolio, in addition to Sooper, have stood out.
Slide 86 of Atlantico’s latest Latin American Digitalization Report presents some promising verticalized startups in the B2B Marketplace and we were very proud to see four companies from Verve Capital’s Portfolio among them. Brazilian Gira and Mexican startup Amiloz were also mentioned along with Clicampo and Sooper.
AUTHOR: MARCELO FRANCO, FOUNDER OF VERVE CAPITAL.
Originally published at https://medium.com on September 30, 2022.
