quinio Raises $20M Seed to Enter E-commerce Aggregator Space

Quinio Secures Funding to Expand Latin American E-commerce Brand Portfolio

A new player has emerged in the competitive e-commerce aggregator landscape, focused on acquiring and scaling successful brands originating from Latin America. These brands currently utilize platforms such as MercadoLibre, Shopify, and Amazon to reach their customers.

$20 Million Investment to Fuel Growth

Quinio, a company headquartered in Mexico, recently announced the successful completion of a $20 million funding round comprised of both debt and equity. These funds will be strategically allocated to incorporate over 30 additional brands into their existing portfolio.

Founding and Expertise

Established last year, Quinio was founded by Juan Gavito, Iker Garay, and Santiago Gavito, brother of Juan. CEO Juan Gavito brings experience from the digital advertising sector, while Santiago Gavito possesses a background in both private equity and venture capital. Iker Garay’s expertise lies in the scaling of startup ventures.

Inspired by a Proven Model

“Iker initially brought the Thrasio business model to our attention, sparking our interest,” explained Juan Gavito in an interview with TechCrunch. “We recognized its potential for value capture and immediately began developing the necessary infrastructure – including a robust pipeline, a skilled team, essential tools, and a thorough understanding of the acquisition process.”

Targeting Medium-Sized Businesses

Quinio’s acquisition strategy centers on medium-sized brands generating annual revenues between $100,000 and $20 million. Following acquisition, the Quinio team concentrates on enhancing sales performance, streamlining operational efficiencies, and optimizing cost structures.

Current Performance and Market Potential

The company is commencing the new year with a portfolio of 10 brands, collectively representing a $10 million annual revenue run rate. This has resulted in consistent double-digit monthly growth. Gavito estimates that approximately 100,000 sellers throughout Latin America align with Quinio’s acquisition criteria, representing a substantial market opportunity valued at $105 billion.

Investment Round Details

The seed funding round was spearheaded by Cometa, with participation from AlleyCorp, DILA Capital, Western Technology Investment, GBM Ventures, Bridge Partners, and a collective of entrepreneurs. Notably, Adalberto Flores, founder and CEO of Kueski, was among the contributing entrepreneurs.

Future Expansion Plans

Juan Gavito anticipates allocating over 80% of the newly acquired capital towards company acquisitions, targeting an average of three acquisitions per month. Furthermore, the company intends to expand its workforce from its current size of 33 employees to over 100 by the end of the following year, extending its search for brands beyond Mexico to include Chile, Colombia, Brazil, and Argentina.

Joining a Growing Trend

With this new funding, Quinio joins a rapidly expanding group of e-commerce aggregators – also known as e-commerce roll-ups – globally, all of which have attracted significant investor interest in the acquisition of marketplace companies.

Recent Investments in the Aggregator Space

Recent examples include a $50 million investment in Beijing-based Nebula Brands, as well as funding rounds for Gravitiq (focused on healthcare brands) and Heyday, which secured a $555 million Series C. Industry leader Thrasio announced a $1 billion investment in October, while Perch received a substantial $775 million investment in May.

Success of the Aggregator Model in Latin America

Juan Gavito believes the e-commerce aggregator model is proving highly successful within Latin America, with several initial companies launching operations in Mexico between January and August of the current year.

Rapid E-commerce Growth in the Region

This success is attributed to the region’s status as one of the fastest-growing e-commerce markets worldwide. Gross merchandise value experienced growth exceeding 60% in 2020, reaching $105 billion – a figure that doubled initial pre-pandemic projections. Continued e-commerce growth of approximately 30% is anticipated for the current year, according to Juan Gavito.

Differentiation Through Local Sourcing

Quinio is actively differentiating itself by prioritizing the acquisition of companies offering locally sourced products, with a goal of having over 60% of its portfolio comprised of such businesses.

Supply Chain Advantages

“This approach provides a key advantage in terms of lead times and working capital requirements, particularly in light of the challenges currently facing the Asia supply chain,” Juan Gavito stated. “Given the size of the market, there is ample opportunity for numerous companies to achieve success with viable business models. For instance, the U.S. market already supports over 20 aggregators, many of which are thriving.”