Mom-and-pop corner store owners in Latin America manage relationships with over 100 different suppliers, on average, often traveling long distances to pick up inventory, so they aren’t able to regularly restock.
Most of these relationships are largely managed manually and on paper, but Chiper developed an e-commerce ecosystem for corner stores that is shifting that relationship into the digital realm.
The Colombia-based company is taking on some of that inventory burden by providing access to inventory at lower prices and often same-day delivery on thousands of products.
Chiper, founded in 2018 by CEO Jose Bonilla, is already the primary supplier and operating system for over 40,000 corner stores to connect them to retail chains like Walmart and 7-Eleven.
“The way that retailers design their systems to visit corner stores means the stores have to buy more products to last a longer time between visits, but often don’t have the working capital or shelf space,” Bonilla told TechCrunch. “We built an end-to-end platform to buy from the CPGs ourselves and deliver it to the corner stores in less than 24 hours. All of the processes are connected with our technology that stakeholders access from an app.”
Bonilla says the company is just getting started, though, as there are more than 3.7 million corner stores across Latin America. Together, they brought in $330 billion in annual revenue in recent years, and Bonilla estimates that will soon reach $500 billion.
To get to a milestone of 100,000 stores, the company recently took in $53 million in Series B funding, led by Nosara Capital, with participation from Tiger Global, Endeavor Catalyst, InQlab, Alter Global and Interplay. To date, the company has raised more than $65 million, which included a $12 million Series A in October 2020.
Both Nosara and Tiger are new investors for the company, which saw seven times revenue growth in the last 12 months. Those results are what triggered the company going into the market and looking for capital to keep the pace, Bonilla said.
It was that year over year growth that attracted Nosara as well, the firm said.
“The Chiper platform dramatically improves the procurement process for corner stores by providing a greater assortment of goods from a broad network of suppliers, faster and more reliable fulfillment through an asset-light logistics network, and lower prices from aggregated demand and a more streamlined supply chain,” Ian Loizeaux, partner at Nosara Capital, said in a written statement. “The business is growing seven times year-over-year and has the highest gross margins we’ve seen in this space globally, which speaks to the strength of their value proposition and the company’s first mover advantage.”
Indeed, Chiper has scaled across both Mexico and Colombia over the past year, amassing 3,000 product SKUs and reaching 10,000 orders per day in the third quarter of this year. It is now poised to launch in Brazil early next year and add another 2,000 products by 2023.
The new capital will aid in that expansion into Brazil; adding 200 employees in areas like engineers, data scientists and machine learning experts; and launching embedded financial services. Bonilla plans to be at 650 employees by the end of the year.
“The challenge is building a habit and moving from decades of buying on paper to using a phone for core business processes,” he added. “We still have a lot of stores to go, and we have to be aggressive in bringing on new customers.”