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Tuna raises $3M to address complexity of e-commerce payments in Latin America
Tuna is on a mission to “fine tune” the payments space in Latin America and has raised two seed rounds totaling $3 million, led by Canary and by Atlantico.
Alex Tabor, Paul Ascher and Juan Pascual met each other on the engineering team of Peixe Urbano, a company Tabor co-founded and he referred to as a “Groupon for Brazil.” While there, they came up with a way to use A/B testing to create a way of dealing with payments in different markets.
They eventually left Peixe Urbano and started Tuna in 2019 to make their own payment product that enables merchants to use A/B testing of credit card processors and anti-fraud providers to optimize their payments processing with one integration and a no-code interface.
Tabor explained that the e-commerce landscape in Latin America was consolidated, meaning few banks controlled more of the market. The address verification system merchants use to verify a purchaser is who they say they are, involves sending information to a bank that is returned to the merchant with a score of whether that match is legitimate.
“In the U.S., that score is used to determine if the purchaser is legit, but they didn’t implement that in Latin America,” he added. “Instead, merchants in LatAm have to tap into other organizations that have that data.”
That process involves manual analysis and constant adjusting due to fraud. Instead, Tuna’s A/B tests between processors and anti-fraud providers in real time and provides a guarantee that a decision to swap providers is based on objective data that considers all components of performance, like approval rates, and not just fees.
Over the past year, the company added 12 customers and saw its revenue increase 15%. It boasts a customer list that includes the large Brazilian fashion chain Riachuelo, and its platform integrates with others including VTEX, Magento and WooCommerce.
The share of e-commerce in overall retail is less than 10% in Latin America. Marcos Toledo, Canary’s managing partner, said via email that e-commerce in LatAm is currently at an inflexion point: not only has the global pandemic driven more online purchases, but also fintech innovation that has occurred in recent years.
In Brazil alone, e-commerce sales grew 73.88% in 2020, but Toledo said there was much room for improvement. What Tuna is building will help companies navigate the situation and make it easier for more customers to buy online.
Toledo met the Tuna team from his partner, Julio Vasconcellos, who was one of the co-founders of Peixe Urbano. When the firm heard that the other Tuna co-founders were starting a business that was applying some of the optimization methods they had created at Peixe Urbano, but for every company, they saw it as an opportunity to get involved.
“The vast tech expertise that Alex, Paul and Juan bring to a very technical business is something that we really admire, as well as their vision to create a solution that can impact companies throughout Latin America,” Toledo said. “The no-code solution that Tuna is building is exciting because it is scalable and can help companies not only get better margins, but also drive their developers to other efforts — and developers have been a very scarce workforce in the region.”
To meet demand for an e-commerce industry that surpassed $200 billion in 2020, Tuna plans to use the new funding to build out its team and grow outbound customer success and R&D, Tabor said.
Up next, he wants to be able to show traction in payments optimization and facilitators in Brazil before moving on to other countries. He has identified Mexico, Colombia and Argentina as potential new markets.
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Yummy raises $4M, aims to be ‘super app of Venezuela’
Yummy, a Venezuela-based delivery app on a mission to create the super app for the country, announced Friday it raised $4 million in funding to expand its dark store delivery operations across Latin America.
Funding backers included Y Combinator, Tinder co-founder Justin Mateen, Canary, Hustle Fund, Necessary Ventures and the co-founders of TaskUs. The total investment includes pre-seeding capital raised in 2020.
“This appears to be a contrarian bet, but Yummy has quickly become the No. 1 super app in Venezuela and proven that the team can scale the business in a difficult territory,” Mateen said in a statement. “Now Vicente and the rest of the Yummy team will expand into more traditional markets with the necessary experience and support to overcome inevitable challenges that they will face.”
Vicente Zavarce, Yummy’s founder and CEO, launched the company in 2020 and is currently part of Y Combinator’s summer 2021 cohort. Born in Venezuela, Zavarce came to the U.S. for school and stayed to work in growth marketing at Postmates, Wayfair and Getaround before starting Yummy. Zavarce was a remote CEO over the past year, stuck in the U.S. due to travel restrictions, but said he is making the most of it.
Yummy’s app can be downloaded for free, and the company charges a delivery fee or merchant fee. In contrast to some of his food delivery competitors, Zavarce told TechCrunch Yummy’s fees are “the lowest in the market” so they do not affect the merchant’s ability to use the app.
Yummy order heat map. Image Credits: Yummy
The company is pulling together additional key components for its super app strategy, which includes launching a ridesharing vertical this year. Yummy has already connected more than 1,200 merchants with hundreds of thousands of customers.
And, over the past year the company completed more than 600,000 deliveries of food, groceries, alcohol and shopping. It reached $1 million in monthly gross merchandise volume while also growing 38% in revenue month over month.
Over the past eight years, the political and economic challenges faced by the country have led to its recent adoption of the U.S. dollar, Zavarce said. In some cases up to 70% of transactions are happening in dollars on the ground. He said this has protected the business against hyperinflation and ultimately created the opportunity for startups to begin operating in Venezuela.
Because of that, combined with more consumer technology innovation over the past decade, Zavarce said there is no reason why Venezuela should not have the best last-mile logistics. It’s there that Yummy has an opportunity to connect multiple vertices into a super app with little to no competition.
“Eventually, other players will enter, but because we have a super app, we already have an amazing frequency of usage,” he added. “We also already have exclusivity with 60% of the food delivery marketplace, which has enabled us to build a moat around the market. We believe we are the right people to execute on this and feel it is our responsibility to do it.”
Plans for the new funding include user acquisition — the company has close to 200,000 registered users already — and to expand in Peru and Chile by August. At the same time, Zavarce will spend some of that capital to attract more users across Venezuela. He also expects to be in Ecuador and Bolivia by the end of the year.
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Flourish, a startup that aims to help banks engage and retain customers, raises $1.5M
It’s not uncommon these days to hear of U.S.-based investors backing Latin American startups.
But it’s not every day that we hear of Latin American VCs investing in U.S.-based startups.
Berkeley-based fintech Flourish has raised $1.5 million in a funding round led by Brazilian venture capital firm Canary. Founded by Pedro Moura and Jessica Eting, the startup offers an “engagement and financial wellness” solution for banks, fintechs and credit unions with the goal of helping them engage and retain clients.
Also participating in the round were Xochi Ventures, First Check Ventures, Magma Capital and GV Angels as well as strategic angels including Rodrigo Xavier (former Bank of America CEO in Brazil), Beth Stelluto (formerly of Schwab), Gustavo Lasala (president and CEO of The People Fund) and Brian Requarth (founder of Viva Real).
With clients in the U.S., Bolivia and Brazil, Flourish has developed a solution that features three main modules:
- A rewards engine designed to incentivize users to save or invest money.
- An intelligent and automated micro-savings feature where users can create personalized rules (such as transferring $15 into a rainy day fund every time their favorite sports team wins).
- A financial knowledge module, where personal financial transactions and spending patterns are turned into a question and answer game.
In the U.S., Flourish began by testing end-user mechanics with organizations such as CommonWealth and Opportunity Fund. In 2019, it released a B2C version of the Flourish app (called the Flourish Savings App) as a pilot for its banking platform, which can integrate with banks through an SDK or an API. It is also now licensing its engagement technology to banks, retailers and fintechs across the Americas. Flourish has piloted or licensed its solution to U.S.-based credit unions, Sicoob (Brazil’s largest credit union) and BancoSol in Bolivia.
The startup makes money through a partnership model that focuses on user activation and engagement.
Both immigrants, Moura and Eting met while in the MBA program at the Haas School of Business at UC Berkeley. Moura came to the U.S. from Brazil as a teen, while Eting is the daughter of a Filiponio father and mother of Mexican descent.
The pair bonded on their joint mission of building a business that empowered people to create positive money habits and understand their finances.
Currently, the 11-person team works out of the U.S., Mexico and Brazil. It plans to use its new capital to increase its number of customers in LatAm, do more hiring and develop new functionalities for the Flourish platform.
In particular, it plans to next focus on the Brazilian market, and will scale in a few select countries in the Americas.
“There are three things that make Latin America, and more specifically Brazil, attractive to us at this moment,” Moura said. “Currently, the B2B financial technology market is still in its nascency. This combined with open banking regulation and the need for more responsible products provides Flourish a unique opportunity in Brazil.”
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SouSmile raises $10M to grow its anti-braces aligner brand
Amid expectations that early-stage funding and valuations will decline due to an economic downturn caused by the novel coronavirus outbreak, young startups like the Brazilian dental company SouSmile, which raised in the time before COVID-19, are feeling grateful for secured runway.
SouSmile is a direct to consumer dental company based in São Paulo. SouSmile has raised $10 million in Series A funding from Global Founders Capital, Kaszek Ventures and Canary, bringing the company’s total funding to $11.4 million. The two-year-old startup sells an invisible aligner and whitening gels through five retail stores in shopping malls across São Paulo and Rio.
SouSmile is a new option for Brazilians hoping to get started on orthodontic work. The process consists of an evaluation by a licensed dentist that includes a panoramic X-ray, 3D scan and a clinical exam. Then, the company approves customers for treatment. SouSmile’s follow-up process includes bimonthly appointments, and costs approximately $1,000, which co-founder Michael Ruah says is 60% cheaper than comparable treatments, and can be paid in installments. Treatment is fast, taking between three to nine months.
SouSmile has a six-person co-founding team. The 100-person startup is made up of 50% licensed dentists.
Ruah anticipates that the coronavirus pandemic will have a negative short-term revenue impact for the company, as they anticipate less foot traffic in retail stores over the coming weeks, possibly months. He hopes that because the business is still young, macro indicators won’t have a huge impact on the bottom line in the medium-to-long term. Ruah says that the most important thing is that SouSmile employees and customers are safe and healthy at this point.
Why is Brazil a good market for a D2C dental startup?
With 2 million orthodontic cases per year, highly populous Brazil is one of the largest dental markets globally, yet the penetration of invisible aligners is less than 2% due to prohibitive prices. Ruah compares this to the 40% penetration in the U.S. for adults, citing Invisalign’s numbers. There’s still a dent to be made, as SouSmile says it saw more than 10,000 bookings last year.
Ruah also cites a cultural reason as to why Brazil is a smart market for a product like this: Brazilians care a lot about both beauty and their oral health. “Brazilians brush their teeth three times a day. They’ll go out for lunch, they’ll come back to the office and brush their teeth. Everybody has their toothbrush and toothpaste with them all the time,” he explains.
SouSmile’s invisible aligner costs around $1,200. Treatment lasts between 3-9 months.
Branding: Cosmetic versus health
SmileDirectClub raised nearly $440 million at a $3.2 billion valuation before going public in 2019. The teeth-straightening company built its brand by leveraging the celebrity beauty angle with Instagram influencer campaigns that marketed the visual results of its product. While SouSmile hopes to see big numbers like its U.S.-based predecessor, it wants to take more of a healthcare-first approach to its branding, rather than cosmetic.
SouSmile is up against some big challenges. Physical retail costs are expensive. Manufacturing is hard, and the company doesn’t appear to be particularly tech-enabled, relying mainly on physical retail presence for customer acquisition.
SouSmile isn’t the only Latin American startup working on an anti-braces dental solution, either. Moons, a Mexican invisible aligner startup that just launched out of Y Combinator, may have a head start. Moons delivers a similar product as SouSmile for around the same cost, and is also using 3D printing to manufacture its aligners. Moons is targeting the Latin America market with $5 million in funding and the Y Combinator stamp of approval. Moons has already opened 18 locations across Mexico and Colombia.
But Brazilian tech can operate like a separate ecosystem apart from adjacent Spanish-speaking Latin America due to country regulations, language barriers and shipping complications. Consumer startups that can deliver products that improve the daily lives of Brazil’s massive middle class are the ones that succeed, and SouSmile now has the capital to shoot its shot.
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Canary’s smart security camera now works with Apple TV
Security camera company Canary has today addressed one of the few complaints customers had with its product: there wasn’t an easy way to watch your camera’s feed on your TV’s big screen. That has now changed with the launch of a new version of the Canary app, which adds support for Apple TV. This lets you view the live stream from your camera on your television, as well… Read More
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Fly Or Die: Canary Home Monitoring System
The home security market is quickly heating up. As IoT continues to be a dominating trend, security systems that use smaller, faster technology will become the central hub of the home for a fraction of the cost of traditional home monitoring systems. Canary is one of the most affordable and attractive options on the market, offering a single system that offers monitoring of everything from… Read More
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Pot is great.