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Flourish Ventures and GFC Lead USD10m Series A for Brazilian Wholesale Marketplace Merce do Bairro

21 October 2021

Flourish Ventures and GFC led a USD10m Series A for Merce do Bairro, a Brazilian same-day delivery wholesale marketplace for SMEs, with follow-on from DOMO Invest, Alexia Ventures, Prana Capital, MAYA Capital, SV Latam, Quartz and Picus Capital. Merce do Bairro was founded by iFood co-founder Guilherme Bonifacio and Ze Delivery co-founder Diego Libanio. 

(LABS News) – A marketplace that connects grocery stores to suppliers, and manages the entire buying and delivery process: this is the proposal of Mercê do Bairro, a Brazilian startup that has just raised a BRL 53 million Series A round led by Flourish Ventures and GFC, and followed by MAYA, SV Latam, Quartz, Picus, Domo, Alexia Ventures, and Prana.

Mercê do Bairro was founded in 2019 by Diego Libanio and Guilherme Bonifácio, co-founders of Zé Delivery and iFood, respectively. With the background from previous entrepreneurial experiences, the duo decided to bet on the business model known as integrated retail. Common in countries like China, the basis of this model is to connect the entire chain with technology. In other words: replace the inventory control spreadsheet with an app that connects small markets to suppliers of all kinds and runs all the buying and selling management.

Mercê do Bairro’s target is smaller businesses, with one to four cashiers. In Brazil, this means a potential market of more than 400,000 stores. “It’s a huge and underserved audience. These entrepreneurs do not have access to management, sales, and credit tools, and have no bargaining power to negotiate prices and services. Not all suppliers sell to them, because many are informal or do not buy the minimum quantities required by the distributors,” explained Libanio.

With Mercê do Bairro’s solution, the grocery store lists the products it needs on the app and waits. The startup assumes from there: it makes the wholesale shopping and delivers the order directly to the store within one business day.

In addition, the startup also connects supply partners, distributors, and manufacturers who have delivery logistics, monitors prices and helps the entrepreneur access credit and loans. Mercê offers two credit options: in one of them, the grocery stores have 7 to 28 days to pay for their purchases; in the other, Mercê works helping them to obtain loans, connecting the stores to partners that offer the service.

In the new investors’ view, by adding financial products such as credit and payment in its vertical solution, Mercê generates a positive impact on merchants’ financial performance and differentiates itself from other marketplaces with similar inventory management solutions. “Mercê has the potential to transform informal retail in Brazil. The easy-to-use platform and the logistics it offers eliminate bottlenecks in terms of supply, inventory management and optimization,” said Arjuna Costa, Managing Partner at Flourish Ventures.

Mercê currently operates in the western, southern and eastern regions of São Paulo city, mainly in peripheral neighborhoods. With the funding, the company will expand operations to the southeastern metropolitan areas, particularly São Paulo, Rio de Janeiro, and Belo Horizonte. The startup intends to help scale up neighborhood markets throughout the country. In addition, it will invest in improving the marketplace and boost its team, especially in the technology and product areas.