miferiaa Mexico-based B2B wholesale market, secured $7 million in seed funding to continue to grow its curated website connecting independent retailers in Mexico with national brands in categories including cosmetics, food and beverages and interior decoration.
In 2021, almost 300 million people were shopping online in Latin America; Mexico accounted for 27% of this e-commerce activity, according to Statista. E-commerce accounted for a small percentageapproximately 6% of all retail sales in Mexico in 2020, and is expected to reach 15% by 2023.
However, Tariq Musa, founder and CEO of Miferia, notes that despite this growth, more than 90% of retail in Mexico still takes place in just 2 million physical stores, and less than 1% of B2B transactions have moved online. line and are still largely dependent. on cash transactions, which often requires retailers to prepay for goods.
By working this way, retailers often give up too much margin, on average 20-30% including markups, making offline options prohibitively expensive for everyone but the biggest brands. Additionally, shipping is expensive, so many retailers collect their own inventory from the distributor. And by relying on cash, brands spend a lot of their time chasing retailers for payments. This revealed a need for access to working capital so retailers didn’t have to sell inventory before they could pay for new inventory, he explained.
“In the traditional retail channel, all inventory purchases have been made the same way for generations — through distributors and offline sales reps,” Musa told TechCrunch. “This analog process requires a lot of manual work and most often favors large distributors. When you combine these pain points, it’s obvious that the marketplace needs a central platform to address these issues related to product discovery, inventory, and working capital. »
This is where Miferia, founded this year, comes in. This allows retailers to bring their inventory relationships online, expand their product selection, and obtain more favorable credit terms.
Users register with the company providing a few details, and some other financials if they want to apply for credit. Then they can access wholesale pricing, which includes over 5,000 SKUs from over 500 brands, add items to cart, and complete the transaction. Miferia also offers free shipping and handles payments so brands don’t have to worry about collections.
Seed financing is the first institutional cycle of the company. The investment was co-led by Bain Capital Ventures and Tiger Global, and included participation from Canary, Latitud Ventures and Asymmetric Capital Partners.
Merritt Hummer, a partner at Bain Capital Ventures, said in an interview that she studied the B2B market for the independent retail channel in other regions after investing last year in France-based Ankorstore, a similar market that connects retailers and brands in Europe. .
Hummer saw a number of B2B markets in Latin America, but said Miferia stood out because it focused more on higher-margin products and curated merchandise compared to others that catered to convenience stores.
We recently reported on some of these wholesale markets, including ZAX, which connects sellers with buyers in Brazil, Morado for the Colombian beauty industry, Novi, for sustainable products, JABU in Africa and GudangADA, which makes something similar in Indonesia.
Meanwhile, Miferia is still in its infancy. Musa spent several months building a team, building a minimum viable product, and working with customers. Now the company is ready to accelerate its growth and will use the new capital to create liquidity in the market and strengthen its team of 30 people.
“Our top priority is to get the flywheel network effect into Mexico before we expand more broadly,” Musa said. “All the traders are talking to each other, so are the distributors, so we think we’re going to grow in a concentrated way.”