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Fairplay thinks it can give an edge to e-commerce startups—it sure has the money, offers over US$3 million

Don't worry, we speak : Español (Spanish), too!

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Contxto – There is still money to be had for those who know where to find it—and those who happen to be in the right industry at the right time. This is particularly true of e-commerce. 

This is something financing platform, Fairplay, wants to make the most of.

Therefore, the Mexican revenue-based financing platform has announced that, as of this week, it will make available to small and medium sized-enterprises (SMEs) in e-commerce a fund of MXN$75 million—that’s over US$3 million. 

Making up for lost time in Latam

Investment in e-commerce is booming in these times of Covid-19. Just today we wrote about how Brazil’s CargoX snapped up US$80 million in a Series E round.

But you don’t need to be an e-commerce giant to compete in this fast-changing industry. You just need the right tools in the right market.

Indeed, although Brazil’s beefed-up population has the size, studies show that Mexico may have the growth to lure in the investors. 

Mexico is the second largest e-commerce market in the region. The country makes up 30 percent of online sales in all of Latin America—of course after Brazil.

Moreover, according to Fairplay, pre-pandemic studies estimated that the Mexican e-commerce sector would have a compound growth of 56 percent between 2019 to 2022. The strongest growth of any country in the region.

Were we talking of most other industries, you might as well throw these pre-Covid-crisis stats in the bin. However, e-commerce has seen a boom in these times thanks to worldwide massive expansions in online shopping due to people’s inability to go out and buy stuff in-person. 

Unfortunately, the crisis conundrum is not solved by simply being an e-commerce business. Those that survive must be able to afford win-out in the race to fill these regional late-adopting markets.

Fairplay thinks it has solved that column of the e-commerce Rubix cube. 

The visibility race is on

Since online commerce demand is now spiking, the key to being competitive isn’t so much to be the best but to be the most visible. 

We’ve seen this in the last-mile delivery market, with delivery apps fighting it out on the streets of Latin America. 

If that weren’t enough ride-hailing apps—like Colombia’s Picap or Mexico’s Pronto—are switching gears and jumping onto the e-commerce game. They need to get a slice of that still growing e-commerce section of pie as their people-moving business models hit a social isolation-shaped wall. 

Thus, in a time where most companies are slashing at their marketing budgets, many e-commerces are having to up theirs. As Fairplay’s release notes:

SMEs often have to choose between investing in inventory and increasing the reach of their marketing campaigns… Most companies do not have access to venture capital to support this type of expansion. Of those who do, between 30 to 40 percent of the capital goes directly towards performance marketing expenses, including Google and Facebook.

Consequently, Fairplay is opening this investment fund to boost startups that do not have enough resources to compete in this ad-arms race by investing in their online marketing campaigns.

If you’ve got an e-commerce and are keen on what Fairplay is offering, check out their website: www.getfairplay.com 

Related articles: Tech and startups from Mexico!

-AG

Alejandro González Ormerod
Historian, writer, and editor from Mexico City. He was a book publisher, academic, and cheesemonger before joining Contxto. Still deciding on which Latin American country to visit next; food and fun are the main criteria.

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