Tuna Raises $3M to Simplify E-commerce Payments in Latin America

Tuna Secures $3 Million Seed Funding to Optimize Payments in Latin America

Tuna is actively working to refine the payments ecosystem within Latin America, and has successfully secured $3 million in seed funding across two rounds. Leading the investment were Canary and Atlantico.

Origins and Founding

The founders – Alex Tabor, Paul Ascher, and Juan Pascual – initially connected while working on the engineering team at Peixe Urbano, a company Tabor co-founded and described as a “Brazilian Groupon.”

During their time at Peixe Urbano, they conceived a method utilizing A/B testing to address the complexities of payments processing across diverse markets.

Development of the Tuna Platform

Leaving Peixe Urbano in 2019, they established Tuna to develop a dedicated payment solution. This platform empowers merchants to leverage A/B testing with credit card processors and anti-fraud services.

The goal is to optimize payment processing through a single integration and an intuitive, no-code interface.

Challenges in the Latin American E-commerce Landscape

Tabor highlighted the concentrated nature of the e-commerce sector in Latin America, where a limited number of banks exert significant market control.

The address verification systems used by merchants to confirm purchaser identity typically involve a bank providing a legitimacy score.

Discrepancies in Verification Systems

“Unlike the U.S., where this score directly influences purchase validation, Latin America lacks widespread implementation of this practice,” Tabor explained.

Consequently, merchants in Latin America must rely on external organizations for this crucial data.

Tuna’s Solution: Data-Driven Optimization

This reliance often necessitates manual analysis and continuous adjustments to combat fraud. Tuna addresses this by conducting real-time A/B tests between processors and anti-fraud providers.

Tuna guarantees that provider selection is based on objective data, considering performance metrics like approval rates, rather than solely focusing on transaction fees.

Growth and Key Clients

Over the last year, the company onboarded 12 new customers and experienced a 15% revenue increase.

Notable clients include the prominent Brazilian fashion retailer, Riachuelo, and the platform integrates seamlessly with systems like VTEX, Magento, and WooCommerce.

E-commerce Growth in Latin America

Currently, e-commerce represents less than 10% of total retail sales in Latin America.

Marcos Toledo, managing partner at Canary, noted via email that Latin American e-commerce is at a pivotal moment, fueled by the pandemic and recent fintech advancements.

Future Potential and Investment Rationale

While Brazilian e-commerce sales surged by 73.88% in 2020, Toledo believes substantial growth potential remains.

Tuna’s solution will assist businesses in navigating these challenges and facilitate easier online purchasing for customers.

Connection to Peixe Urbano

Toledo’s initial connection to the Tuna team came through Julio Vasconcellos, a co-founder of Peixe Urbano.

The firm recognized the opportunity when learning the Tuna founders were applying optimization techniques developed at Peixe Urbano to a broader range of companies.

Canary’s Perspective on the Tuna Team

“We greatly admire the deep technical expertise that Alex, Paul, and Juan contribute to this technically demanding business, along with their vision for a solution impacting companies throughout Latin America,” Toledo stated.

“The no-code approach Tuna is developing is particularly exciting due to its scalability and ability to improve margins while freeing up developers for other critical tasks – a valuable resource in this region.”

Future Plans and Expansion

To address the growing demand in an e-commerce market exceeding $200 billion in 2020, Tuna intends to utilize the new funding to expand its team and bolster customer success and R&D efforts.

The immediate focus is demonstrating success in payments optimization within Brazil before expanding into other countries, with Mexico, Colombia, and Argentina identified as potential new markets.