Contxto – With all of its charms and curses, Latin America represents the perfect market for last-mile delivery startups to succeed. Matter of fact, while Rappi conquers new territories faster than Alexander the Great, there’s yet another participant winning over a smaller niche region.
Originally from El Salvador, Hugo Technologies is sweeping the delivery industry in Central America off its feet. And soon, the Caribbean, too. After a successful landing out of El Salvador and into Honduras, the company is already targeting a new market: the Dominican Republic.
If victorious, this will represent the entry point for the startup to venture into other Caribbean countries.
“Honduras has been one of the countries where we identify ourselves most on the platform because we have had a reception not only from end-users but from all the businesses that have placed their trust in us.”
In Honduras, HugoApp is already present in Tegucigalpa and San Pedro Sula and is soon arriving in La Ceiba.
Back in February, the startup raised its most recent funding round at an undisclosed amount. Now, it aims to reach growth levels of up to US$50 million annual billings. Allegedly, the backers include international investors such as Frontier VC and TMT Investments.
Previously, TMT Investments has also invested in world-class companies such as Pipedrive, Skype, Spotify and Taxify. Latin American is now on the firm’s horizons.
“This is the first investment in the Latin American region for TMT Investments but we are pleased to support and join the team,” said investment director of TMT Investments, Plc, Alexander Pak. “Hugo has demonstrated his ability to scale and expand while maintaining high-quality service, innovating the traditional delivery market.”
Launched in 2017, the company is already operating in three different countries. These include its native El Salvador as well as Costa Rica, Honduras and Guatemala. It also expects to expand to other Latin American cities throughout the year. In the meantime, Hugo is capturing a lot of attention from investors.
“I have been working with the founders of Hugo for over a year and I was really surprised (at their) speed of execution and the ability to conquer new markets,” said Mikko Silventola, an investor in over 50 companies and President of Frontier VC.
“The plans for Hugo are much bigger than just Central America, so I supported and invested in the team. This was our first investment in Central America. There is enormous potential for Hugo in Latin America and in the world.”
The real “super app”
Already working on its third version of the app, the company is looking forward to the opportunity of competing with Uber. Not only will they compete in the food delivery space but in the ride-hailing industry as well. It even plans to deploy the new feature in the upcoming months.
In hopes of offering these services in partnership with newer vehicle units, specifically 2018 and 2019 models, Cuellar said, “We want to do it more differentiated and more controlled.”
Regarding the delivery service, Hugo started by focusing on food products. Nevertheless, it has been adding new products to its catalog. Some of these involve convenience store items, medicines, gifts, event tickets, and even cash loans.
Surprisingly, the company isn’t afraid to call itself “the most complete app in Latin America for delivery services.”
While still smaller than Rappi, it seems like they’re closer to becoming the “super app” Rappi aims to become. Hugo is no different to use than other last-mile delivery apps. Users connect with deliverers called “Hugos” (seriously?), to fulfill their orders, allowing both cash and card payments.
The market is certainly big enough for more players, especially in mostly unattended countries, nevertheless, it would be very interesting to see more companies tackling other deep-rooted problems in the region instead of more competitors in a single industry.
Venture capital deals in marketplace startups are booming in Latin America, and personally, they aren’t exactly as thrilling as those in other crucial areas such as cybersecurity, biotech and eco-friendly products.