Chiper: Inventory Management for Latin American Corner Stores

Chiper Revolutionizes Supply Chains for Latin American Corner Stores

Typically, small, family-owned corner stores throughout Latin America maintain relationships with an average of over 100 suppliers.

These store owners frequently undertake extensive travel to secure their inventory, leading to infrequent restocking cycles.

Digitizing the Traditional Supply Process

Historically, these supplier relationships have been managed through manual processes and paper-based systems.

However, Chiper has created a digital e-commerce ecosystem specifically designed for these corner stores, transitioning these interactions into a digital format.

Reducing Inventory Burdens and Costs

The Colombia-based company is actively alleviating the inventory challenges faced by these retailers.

Chiper provides access to products at reduced prices and often offers same-day delivery for thousands of items.

Rapid Growth and Market Penetration

Founded in 2018 by Jose Bonilla, who serves as CEO, Chiper has quickly become a primary supplier and operational platform for over 40,000 corner stores.

Bonilla explained to TechCrunch that traditional retail systems necessitate larger purchases from stores to cover extended periods between supplier visits.

This often strains working capital and limits available shelf space.

Chiper addresses this by offering an end-to-end platform for direct purchasing from consumer packaged goods (CPG) companies, with delivery within 24 hours.

All processes are integrated through the company’s technology, accessible via a dedicated app.

A Vast Untapped Market

Despite its current success, Bonilla believes Chiper is only beginning to realize its potential.

There are more than 3.7 million corner stores operating across Latin America.

These stores collectively generated $330 billion in annual revenue in recent years, a figure Bonilla projects will soon reach $500 billion.

Securing Funding for Expansion

To reach a milestone of 100,000 stores, Chiper recently secured $53 million in Series B funding.

Nosara Capital led the round, with participation from Tiger Global, Endeavor Catalyst, InQlab, Alter Global, and Interplay.

To date, the company has raised over $65 million, including a $12 million Series A round in October 2020.

Driven by Impressive Revenue Growth

The company’s decision to seek additional capital was spurred by a remarkable sevenfold increase in revenue over the past year.

This substantial growth attracted both Nosara and Tiger Global as new investors.

Nosara highlighted the company’s impressive performance as a key factor in their investment decision.

Value Proposition and Competitive Advantage

“The Chiper platform significantly streamlines the procurement process for corner stores,” stated Ian Loizeaux, partner at Nosara Capital.

“It provides a wider product assortment, faster and more reliable fulfillment through a flexible logistics network, and lower prices due to aggregated demand and a more efficient supply chain.”

Loizeaux further emphasized the company’s strong value proposition and first-mover advantage, noting its exceptionally high gross margins.

Scaling Operations and Future Plans

Over the past year, Chiper has expanded its operations across Mexico and Colombia.

The company now offers 3,000 unique product SKUs and processes 10,000 orders daily as of the third quarter of this year.

Plans are underway to launch in Brazil early next year and expand its product catalog by an additional 2,000 items by 2023.

Investing in Growth and Innovation

The newly acquired capital will be used to facilitate expansion into Brazil.

It will also support the addition of 200 employees in key areas such as engineering, data science, and machine learning.

Furthermore, Chiper intends to launch embedded financial services.

Bonilla aims to have a total of 650 employees by the end of the year.

Overcoming Adoption Challenges

“The primary challenge lies in establishing a new habit and transitioning from decades of paper-based purchasing to utilizing a smartphone for essential business operations,” Bonilla noted.

“We still have a significant number of stores to onboard, and we must aggressively pursue new customer acquisition.”