Nuvemshop raises US$30 million in bid to become Latin America’s Shopify

Contxto– Argentine e-commerce platform Nuvemshop raised US$30 million in funding to expand their operations as a website builder for small and medium enterprises (SMEs). 

Nuvemshop (known as Tiendanube in Spanish) started nearly ten years ago in Buenos Aires, and has since expanded to Brazil and Mexico, with plans to move to Colombia and Peru in 2021. 

Now the company has over 60,000 clients transacting over US$100 million per month in sales.

Nuvemshop raises largest investment to date

Back in 2017, Nuvemshop raised US$7 million in Series B funding. Now they’ve raised more than four times that amount in a Series C; a good omen no doubt.

Nuvemshop plans to use the round to enhance and expand its website-building network, which offers a personalized online shop adapted to the client’s brand and image, with customizable layouts, products, shipping, and mobile app. 

Their goal, states Santiago Sosa, co-Founder and CEO of Nuvemshop, is to “reduce the barriers of entrepreneurship to zero” and to help SMEs grow in the increasingly challenging Latin American business environment. 

Nuvemshop is healthy competition to e-commerce giants

Sosa expects that, in the next 15 years, around 90 percent of retail will be somehow digitized or tech-enabled.

Nuvemshop’s presence in the Latin American e-commerce market offers a necessary balance to the hegemony of Mercado Libre and Amazon in the sector.

One key difference, however, is that Mercado Libre and Amazon are focused on the buyer and less so on the retailer, who must adapt to sometimes excessive fees. 

Platforms like Nuvemshop or Shopify, on the other hand, offer direct sales alternatives that come with lower fees and less intermediaries between the retailer and the buyers. 

In addition, e-commerce platforms do not have to worry about the storage of its products, something that the bigger companies must consider —by November, Mercado Libre expects to have 60,000 square meters (~197,000 square feet) of storage space.

It all comes down to the optimization of the platform, which must adapt to the particularities of a given business:

It must be able to handle high rates of traffic without crashing, as well as offering online customer support and efficient delivery service (sometimes through third-party logistics providers).

If Sosa’s predictions for the next 15 years are correct, perhaps investments in platforms such as Nuvemshop can lead to the creation of a different style of e-commerce. One that can co-exist with the giant corporations instead of having to compete with their hegemony. 

-BIC