Techstars and Meta assist the profitable LatAm startup Mercately in securing a $2.6 million seed funding round
WhatsApp has emerged as one of the most widely used applications for online shopping in Latin American countries such as Brazil and Chile. During the pandemic, it was the preferred e-commerce platform in the region.
However, WhatsApp is intended as a messaging platform rather than an e-commerce site. Mercately, a startup, is developing the back-end software to facilitate the sale of brands through WhatsApp.
Mercately is a business-to-business software that establishes the infrastructure for brands to sell directly on WhatsApp.
The company utilizes AI agents to assist brands in communicating with customers, verifying inventory, processing payments, and generating purchase orders without requiring the customer to exit WhatsApp. Additionally, the company integrates with platforms such as Stripe and HubSpot.
Henry Remache, the CEO and co-founder of Mercately, stated that the concept was conceived in 2021 while he was engaged in software development for companies in Latin America.
He had a client in Ecuador who was interested in selling shoes through the e-commerce behemoth MercadoLibre.
Upon learning that this client generated 90% of its revenue through WhatsApp, Remache realized that brands should not pursue the establishment of new platforms; instead, they should focus on increasing their sales within their current channels.
“It is relatively uncommon for a small or medium-sized business in Latin America to have a website; they conduct all transactions via WhatsApp,” Remache stated.
“The behavior is already present; individuals use WhatsApp to communicate with their family and make purchases.” We are adopting the behavior and simplifying the process for these companies to sell in the areas where people are.
Remache acknowledged that the startup’s development was challenging. Latin America is a fragmented market with a variety of currencies and transportation processes.
The organization was established in 2022 and presently collaborates with over 1,000 organizations in 20 nations. He stated that Mercately has generated over $1.5 million in annual revenue and is profitable.
Remache stated, “We have experienced a 3.5x increase in growth annually over the past two years.” “The expansion has been extraordinary.” An increasing number of businesses have implemented this type of system.
Companies acknowledge that they must adjust to consumer behavior rather than relying on traditional methods, such as websites.
The startup recently secured a $2.6 million pilot round, led by Inventus Capital Partners and SVQuad and included Techstars, Salkantay Ventures, and BuenTrip Ventures.
Remache stated that the capital will be allocated to recruiting additional AI engineers to enhance their AI chatbots.
Additionally, the funds will be allocated to strengthening Mercately’s market share in Brazil and the United States, which are countries in which they currently operate but have not yet achieved a significant market share. Remache stated that fundraising was challenging.
“First and foremost, the economic situation in Latin America is somewhat unique; there is not a significant amount of money available,” Remache explained. “Our status as a Techstars company has provided us access to new opportunities.” Techstars was undoubtedly a significant development for us.
In 2022, the company participated in Meta’s “Future of Business Messaging Platform” program, which served as an introduction to their leading investors, Inventus Capital Partners and SVQuad.
Remache stated that Mercately is both organizations’ inaugural investment in Latin America.
Remache also mentioned that their lead investors are from India, another country that extensively utilizes WhatsApp. Consequently, they comprehensively understand the extent to which WhatsApp is ingrained in the culture.
In recent years, WhatsApp has emerged as a hub for businesses developing on the platform, particularly in Latin America.
Magie, a Brazilian company that enables its users to transmit money and pay bills through WhatsApp, recently secured a $4 million seed round led by Lux Capital.
This investment marks the company’s inaugural venture into the region. Félix Pago is another company that raised $15.5 million in a round to facilitate WhatsApp payments earlier this year.
Mercately is not the sole organization that develops commercial services for WhatsApp. Supported by private equity, Infobip is an organization that emphasizes consumer engagement and marketing.
Funded by venture capital, Trengo is an additional company emphasizing WhatsApp communication with consumers.
These organizations or a newcomer could threaten Mercately’s market share if they expand their business services. Meta, of course, has the option to implement these features.
Remache stated that WhatsApp’s profound influence on Latin American culture is why many companies are leveraging the platform. The platform is utilized by over 90% of internet consumers in the region.
Although the adoption rate in the United States has not been as high as in other regions, it is increasing. Remache anticipates that Mercately will capitalize on this development.
“I am reminded of how Shopify streamlined web-based e-commerce in the United States.” “We are streamlining WhatsApp commerce in Latin America,” Remache stated.