Miferiaa business-to-business wholesale marketplace based in Mexico, has spent $7 million in seed funding to further develop a curated website that connects independent retailers in Mexico with domestic brands in categories such as cosmetics, food and beverages and home decor.
In 2021, nearly 300 million people shop online in Latin America; Mexico accounted for 27% of that e-commerce activity, according to Statista. E-commerce is a small percentagearound 6%, total retail sales in Mexico by 2020 and are forecast to grow to 15% by 2023.
However, Tariq Musa, founder and CEO of Miferia, notes that despite that growth, more than 90% of retail activity in Mexico still takes place in just 2 million physical stores and less than 1 % of B2B transactions go online and the majority is still dependent. For cash transactions, retailers are often required to prepay for merchandise.
Working this way, retailers often put too much margin, averaging 20% to 30%, including price increases, which makes offline options prohibitive to all. everyone, but the biggest brands. In addition, shipping costs are expensive, so many retailers take stock from their distributors themselves. And by relying on cash, brands spend a lot of time chasing retailers for payments. This demonstrates the need to access working capital so retailers don’t have to sell off inventory before they can pay for new inventory, he explained.
“In brick-and-mortar retail, all inventory purchases have been done the same way for generations – through offline distributors and sales reps,” Musa told TechCrunch. “This same process requires a lot of manual labor and often favors large distributors. When you combine these pain points, it becomes clear that the market needs a central platform that addresses these issues around product discovery, inventory, and working capital.”
That’s where Miferia, founded this year, comes in. This allows retailers to bring their inventory relationships online, expand their product selection, and receive more favorable credit terms.
Users register with the company by providing some details and some other financial information if they want to apply for credit. They can then access wholesale prices, including more than 5,000 SKUs from over 500 brands, add items to their cart, and complete the transaction. Miferia also offers free shipping and payment processing so brands don’t have to worry about collections.
Seed funding is the first institutional round the company has undertaken. The investment was co-led by Bain Capital Ventures and Tiger Global, and involved Canary, Latitude Ventures and Asymmetric Capital Partners.
Merritt Hummer, a partner at Bain Capital Ventures, said in an interview that she has been looking into the B2B market for independent retail in other regions after investing last year in France-based Ankorstore. , a similar marketplace connecting retailers and brands in Europe. .
Hummer has seen quite a few B2B markets in Latin America, but says Miferia stands out because of its greater focus on higher-margin merchandise and merchandise management compared to other markets that cater to stores. on the street corner.
We recently reported on some of those wholesale markets, including ZAXconnect sellers with buyers in Brazil, Morado for Colombia’s beauty industry, Noviceto have sustainable goods, JABU in Africa and GudangADAdoing something similar in Indonesia.
Meanwhile, Miferia is still in its early stages. Musa spent months assembling a team, building a minimal viable product, and working with customers. The company is now poised to accelerate growth and will use the new capital to build liquidity in the market and add to its 30-person team.
“Our first priority is to bring the flywheel network effect to Mexico before we go wider,” says Musa. “All the store owners talk to each other, as do the distributors, so we feel we will grow on a centralized basis.”