Tiger Global backs Favo, which creates an easier way for Latin Americans to order groceries online – TechCrunch
Favo, a Brazilian social commerce platform, has closed a $ 26.5 million Series A funding to continue developing its app that takes grocery orders through local social media.
Tiger Global Management led the round, with participation from existing investors GFC, Elevar Equity, Kevin Efrusy, David Velez, FJ Labs and H2O. The latest round gives the company total funding of around $ 37 million since the company was founded in 2019 by Alejandro Ponce and Marina Proença.
Families in Brazil spend an average of $ 118 per month on food. According to IBGE data, they spend up to 22% of their budget on groceries. Favo enables underemployed entrepreneurs to create new sources of income through regular sales commissions from their own local network. People order groceries through the Favo app, and the logistics system fills the order and arranges delivery, in bulk, to the entrepreneur the next day. The contractor makes the last mile delivery.
Ponce was previously the founder of another company, but felt he was falling short of his goal. He was introduced to “ikigai,” the Japanese concept for finding your goal, which he explained says to do what you love and what keeps you going. When he heard about social commerce from a friend, he traveled to China in 2019 to see it with his own eyes.
“I came back and knew this was what I wanted to build,” said Ponce.
He met Proença, who has a background in marketing and user experience. They bonded from their humble beginnings and set out to build a business for families like theirs that would bring e-commerce to all Latin American consumers, not just the wealthy.
“We are creating a new class of entrepreneurs,” he added. “We are giving the unemployed, mainly mothers, the technology and logistics to become homeowners and generate additional income for households. It could be one of the biggest e-commerce platforms in Latin America because we democratize it. “
By making entrepreneurs the contact point for buyers, Proença said Favo is removing the lack of confidence in buying groceries online, which included fear of not receiving their goods because they had no no human to talk to.
Working with Favo doesn’t cost entrepreneurs either.
“A lot of direct selling organizations force people to buy things, but in our case, they don’t have to do anything,” Ponce said. “Latin America is 20 years behind the United States, and in most cases, this is the first time a customer is introduced to e-commerce in their life. “
Favo was launched in Peru in 2020 and then in Brazil. The co-founders plan to focus the new funding on logistics and fulfillment operations, as well as expansion into Brazil and Mexico. Ponce expects to be in 20 cities in the coming months.
The company works with 160,000 buyers and sees its revenue increase by 30% month over month. Buyers can choose from over 3,000 products delivered to them within 24 hours.
Meanwhile, Ponce said Favo has partnered with this series of investors because they are known to help with the expansion. He added that Tiger Global has already helped put the company on the right track.
“Favo’s innovative social commerce business model and rapidly growing logistics platform are transformative developments for the procurement and distribution of merchandise in Latin America,” said Griffin Schroeder, partner at Tiger Global Management, in a commentary. written statement. “We are delighted to support Favo’s mission to democratize e-commerce and to partner with Alejandro and Marina as they rapidly expand into new markets. “