Mexico City-based online supermarket Jüsto brought in another $12 million seven months after closing its seed round.
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We covered the 1-year-old company’s $10 million seed round in November. Since then, the company has been growing by 70 percent month to month, Ricardo Weder, Jüsto’s founder and CEO, told me in an interview.
The follow-on investment came from existing investors Foundation Capital, Mountain Nazca and FEMSA Ventures, with participation from H20 Capital, SV Latam and S7V. The new funding gives Jüsto $22 million in total funding over the past year, Weder said.
Jüsto saw five times growth in orders since the outset of COVID-19. But while many people are ordering groceries online, e-grocer penetration in Latin America is less than 1 percent, Weder said.
He said he was not looking for new funding, but that small penetration rate combined with the many inbound requests from investors led him to extend the seed round and drive his mission to “disrupt the Latin American grocery industry,” and jumpstart international expansion.
The company is planning to expand into 10 Mexican cities before heading to Colombia, which Weder said has similar opportunities and growth as Mexico. He also has Peru, Brazil, Ecuador and Venezuela on the list. Each country will get its own automated fulfillment centers, he said.
Food freshness is important in Mexico and Latin America, so the company will use the funding to invest heavily in technology and develop its own systems to provide the freshest food possible and reduce waste.
In addition, Jüsto sources about one-third of its inventory from small farms and businesses that find it difficult to otherwise sell into the larger grocery chains, and will create a business-to-business channel to sell to restaurants, Weder said.
“We are able to shorten the time food is in our fulfillment centers and one of the first supermarkets not to use plastic bags,” he said. “We aim to take 10 [percent] to 15 percent of the grocery market. I believe this is what the industry should look like, and we are trying to help change it.”
Illustration: Li-Anne Dias