Photo Credit: sonreír siempre Rosa Matilde Peppi from Pixabay

According to a recent market report, Latin America’s e-commerce market is expected to grow at 29% CAGR to $580 billion by 2024. The pandemic conditions have accelerated this growth and led to the rise of several unicorns in the region.

Olist’s Offerings

Founded in 2015 by Tiago Dalvi, Brazil-based Olist provides growth opportunities through digital retail for all size of businesses. The company assists businesses by connecting them to larger product marketplaces, thus helping entrepreneurs sell their products to a broader customer base. Its technology allows smaller merchants to get access to a wider market through a SaaS licensing model. The company claims to have more than 45,000 shopkeepers and retailers as clients.

Olist’s flagship service Tiny is an ERP management service that helps smaller businesses leverage the power of technology services. It allows entrepreneurs to have full control and management over their online store sales. With the centralization of all information in its ERP, users are able to have control over inventory, manage orders received, and create an easier and more agile sales process. Recently, Olist improved this service by entering into a partnership with Shopify. The partnership will help integrate Shopify’s capabilities into Tiny as well.

Other services offered by Olist include digital marketplace and a fulfillment service called Olist Pax. Olist Pax allows businesses to get great deals on freight and offer next day delivery capabilities. Businesses get access to a larger network of delivery capabilities without investing in the service.

Olist’s Financials

Olist doesn’t report financials, but the market estimates its revenue at $84 million. Its profitability status is not known.

The company has raised $296 million in five rounds led by Corton Capital, Wellington Management, Goldman Sachs, Kevin Efrusy, GloboVentures, SoftBank Group Corp, Valor Capital Group, VELT Partners, and Redpoint eVentures. Its most recent round was held in December 2021 where it raised $186 million at a valuation of $1.5 billion. It recently began operations in Mexico and is looking to capture a bigger market share in the Latin American market this year.

Merama’s Offerings

Founded in 2020 by Sujay Tyle, Felipe Delgado, Olivier Scialom, Renato Andrade, and Guilherme Nosralla, Brazil-based Merama is another direct to consumer e-commerce player. Similar to Globalbees in India, Heyday, and Thrasio in the US, Merama helps leading brands and entrepreneurs in Brazil, Mexico, Columbia, Chile and Peru grow their brand by acquiring a stake in their businesses. But, unlike them, it does not aggregate these companies. Instead, Merama partners with e-commerce product sellers in Latin America by purchasing a stake in businesses and then works with their teams to help them grow and boost technology while providing them access to non-dilutive working capital.

So far, Merama has partnered with over 20 brands in the region. It claims to have several more brands in the pipeline across Latin America and the US.

Merama’s Financials

Merama does not report its financials, but the companies that it has partnered with have generated over $250 million in annual revenues in 2021 and are highly profitable.

The company has raised $345 million in four rounds of funding led by Valor Capital Group, Rappi, Monashees, Balderton, UALA Spain, Loggi, SoftBank Group Corp, GloboVentures, and MadeiraMadeira. Its most recent round was held in December 2021 where it raised $60 million at a valuation of $1.2 billion.

I don’t really see any justification for these stellar valuations for either Merama or Olist. Merama claims to be profitable, but I would like to see more detailed metrics that support these values.