Zax Raises $6M to Expand B2B Marketplace in Latin America

Challenges Facing Small Sales Businesses in Latin America

Maintaining the viability of a small sales enterprise in Latin America often presents significant hurdles. These can include extensive travel requirements for sourcing products, insufficient working capital, and difficulties in processing payments. Such inefficiencies ultimately impact wholesalers, leading to increased costs and extended delivery timelines.

The Founding of ZAX

Recognizing these challenges, Bruno Ballardie and Fernando Zanatta, both experienced entrepreneurs, launched ZAX in 2019. Their goal was to create a unified platform integrating freight, delivery, and payment solutions to facilitate connections between sellers and buyers within Brazil.

Founders' Backgrounds

Prior to ZAX, Ballardie served as the founder of eÓtica, an online eyewear retailer that was later acquired by Lema21 in 2018. Zanatta previously founded Netlolo, a platform connecting clients with global specialists. He also held the positions of CTO at Dafiti and COO at Buscapé, bringing substantial technical expertise to the venture.

Identifying a Market Discrepancy

Ballardie and Zanatta observed a rapidly expanding direct-to-consumer market fueled by technological advancements. However, the wholesale sector was not experiencing comparable growth. Traditional practices, such as traveling to major cities like São Paulo to procure inventory and utilizing manual order-taking methods alongside WhatsApp for transactions, were prevalent.

ZAX's Core Mission

“Our aim is to empower businesses to thrive,” Ballardie explained to TechCrunch. “The market exhibited a significant lag – with e-commerce penetration at only 7%, and wholesale even lower at 1% or less. Logistics, payments, and product discovery were all underdeveloped, prompting us to develop a comprehensive solution.”

Market Size and Expansion

ZAX estimates its potential addressable market for B2B transactions within Brazil alone to be BRL 2.4 trillion, equivalent to $445.6 billion, according to Ballardie. Initially focused on clothing wholesale, the platform has broadened its offerings to include footwear, electronics, toys, accessories, and beauty products. Buyers utilize the platform to select products, choose shipping options, and finalize payment methods.

Series A Funding

ZAX recently secured $6 million in Series A funding, led by Atlantico, with participation from FJ Labs, Caravela Capital, GFC, and Canary. GFC and Canary had previously invested in ZAX during earlier funding rounds. This new investment brings the company’s total funding to $8.3 million.

Investor Confidence

Julio Vasconcellos, Atlantico’s managing partner, stated, “ZAX has demonstrated exceptional execution in a short timeframe.” He further noted the company’s potential to assist both sellers and buyers not only in Brazil but throughout Latin America, where technology adoption can significantly enhance wholesale and retail growth.

Growth and Current Status

ZAX currently collaborates with over 700 suppliers, a substantial increase from the 100 it worked with before the pandemic. Since March 2020, the company’s revenue has experienced a tenfold increase, as reported by Ballardie. The team comprises 65 employees, and the platform serves more than 50,000 buyers.

Future Plans and Expansion

The newly acquired funding will be used to expand ZAX’s operations into two additional regions within Brazil and to broaden its product range, particularly in the beauty and accessories categories. Ballardie also intends to recruit further personnel for technology and product development roles.

Investing in Financial Services

ZAX is also investing in financial services, initiating pilot programs for buy now, pay later options and integrating with financial partners to provide working capital solutions for its customers. Currently, the company offers a 30-day line of credit and a point-of-sale system, with plans to introduce a digital wallet and additional payment tools in the future.

• Key takeaway: ZAX is addressing critical inefficiencies in the Latin American wholesale market.
• Future outlook: Expansion and financial service integration are key priorities.