Following multiple earlier ventures and a nine-year period dedicated to developing Nuvemshop as a Latin American equivalent to Shopify, the company’s four founders have successfully secured $30 million in venture capital to facilitate expansion.

This latest round of funding was provided by returning investor Kaszek Ventures, alongside lead investor Qualcomm, with additional participation from FJ Labs, IGNIA, Elevar Equity, and Kevin Efrusy, utilizing funds from his personal investments as a partner at Accel Partners.

The journey began in Buenos Aires for Santiago Sosa, Alejandro Vazquez, Martin Palombo, and Alejandro Alfonso. Initially, the group attempted to create marketplace software tailored for the Latin American market. When this proved unsuccessful, they shifted their focus to addressing a more fundamental need – enabling small and medium-sized businesses to establish an online presence.

Currently, the platform supports 65,000 businesses, offering a comprehensive suite of tools encompassing billing, payment processing, logistics, and shipping, and facilitating over $100 million in monthly sales. Operating under the names Nuvemshop in Brazil and Tiendanube throughout the rest of the region, the company maintains offices in São Paulo, Buenos Aires, and Mexico City, with planned expansions into Colombia and Peru in 2021.

Nuvemshop transitioned from a consulting-based service to the integrated software solution that has attracted investment from firms like Qualcomm Ventures.

“Nuvemshop’s platform empowers businesses to undergo digital transformation and has assisted thousands of SMBs across Latin America in establishing an online presence through its comprehensive and seamlessly connected solutions,” stated Alexandre Villela, Senior Director at Qualcomm Technologies Inc. and Managing Director at Qualcomm Ventures Latin America. “We admire their dedication to strong engineering principles and are eager to support their growth with this investment.” 

Nuvemshop initially received funding in 2015 from Kaszek Ventures ($5 million), and subsequently raised an additional $7 million from regional investors as the business gained momentum.

The company generates revenue through a subscription model, starting at $3 per month, coupled with transaction fees that decrease as customers opt for higher-tier subscription plans.

With a firm foothold established in the region, the company will concentrate on three key areas for future growth, as outlined by chief executive Santiago Sosa.

The company intends to introduce its own payment processing and logistics gateway. This marketplace will provide customers with enhanced shipping options by consolidating lower-volume orders into a unified delivery and ordering system. Nuvemshop also offers its clientele an app store to connect them with innovative developer tools.

Furthermore, the company plans to broaden its range of financial services. Building upon its existing payment processing capabilities, it will explore developing additional services centered around revenue-based lending.

Similar to Shopify, Nuvemshop provides a crucial alternative to large e-commerce marketplaces such as MercadoLibre and Amazon. “Their primary focus is consistently on optimizing the buyer experience,” Sosa explained. This approach can create significant pricing pressures for retailers, and Nuvemshop presents a direct sales alternative with, according to Sosa, more favorable fee structures.

Sosa observes a substantial, untapped demand in the market.

“Predictions suggest e-commerce will grow from approximately 10% to roughly 20% of total retail sales, mirroring trends in other countries. However, we anticipate a more significant disruption of the commerce landscape over the next 15 years, and we are confident that around 90% of retail will be, in some way, enabled by technology,” Sosa stated.