Bloomberg Línea — Cubbo, an e-commerce fulfillment platform that operates in Mexico, Colombia, and Brazil, has raised a pre-Series A round led by San Francisco-based SV LatAm Capital, an existing investor, and Gerdau Next Ventures, the corporate venture capital fund of Gerdau Next, Brazil’s steel producer Gerdau’s new business division.
U.S.-based angel investors also supported the round, the amount of which was not disclosed.
The new investment comes seven months after the $4 million Seed round. “The investment in Cubbo reinforces Gerdau Next Ventures’ efforts to invest and develop the mobility and logistics sectors in Latin America, supporting a business in an important and growing market, with many opportunities,” said Mateus Jarros, leader of Gerdau Next Ventures, in a press statement.
In March, Cubbo acquired DedaLog, a São Paulo-based e-commerce fulfillment startup, in a bid to grow in Brazil.
“We had a board meeting earlier this year. We didn’t realize we were going to do the acquisition. Between board meetings, we wanted to carry out a round in the second quarter, to expand in Rio de Janeiro, and we needed a warehouse in Colombia,” Brian York, co-founder and CEO at Cubbo, said in an interview with Bloomberg Línea.
“In that meeting we decided to double down to this pre-A, to get full steam, get a new warehouse and continue to build leadership in Brazil, besides expanding to Rio de Janeiro,” he added.
Most of funds from the round will be channeled into Brazil, to build a new warehouse in São Paulo, and put together a new space in Rio de Janeiro, building the team there and in Colombia, where the company started from scratch in December.
Cubbo facilitates local and international brands’ sale of products directly to their consumers, handling the packaging and shipment of goods for independent brands. The startup stores the goods in its warehouses, and items can be delivered within the same day.
The company says it has profitable operations between Mexico, Brazil, and Colombia. Amid recent layoffs and signs of recession, York says Cubbo operates near breakeven, and that it will not be reducing its headcount to prepare for the winter. In fact, the company is hiring.
“What is unique here in Brazil is that the packers are full-time hires, they know how the company works, they are qualified and they can scale up and become sales managers. What I’ve learned doing supply chain in startups is that it’s not easy to do e-commerce fulfillment, and I love the fact we can scale up the team with packers,” said York.
Founded in 2021, the startup currently has 35 employees.
“It’s a metric I’m really proud of. Three countries shipping hundreds of thousands per month. This quarter we’re growing over 100% over last quarter, and we expect revenue to grow six-fold from January to December,” he said.
York says the most challenging thing for Cubbo now is scaling its global brands. It has over 100 clients, and the largest are in Los Angeles and Barcelona. “The biggest issue is dealing with customs, making sure the products are labeled right, and investing in partnering with global brands and being more efficient”. he added.
Mexico is where the company has the most clients, and is where it all began, in April 2021.
“Our existing customers want to come to Brazil, so we expect Brazil to overtake Mexico in the near future. We’re running the company as fast as we can, expanding to Rio de Janeiro, Guadalajara, Barranquilla, Medellín, and we hope to expand to Chile and Peru in the next few months, maybe with small acquisitions, as our customers are pushing to launch there.”