E-commerce in Latin America has exploded in the past two years, but against an infrastructure that was unprepared for all that activity. During this time, startups have risen to the challenge of strengthening the infrastructure needed to get packages to their final destination quickly and more cheaply.
That goal has created a somewhat competitive landscape, especially within the last-mile sector. Treggo, an Argentina-based company, is among companies such as 99 Minutos, Cubbo and Cargamos tackling last-mile deliveries.
In Treggo’s case, developing technology to make urban shipments in Argentina, Mexico and Chile easier and for merchants of all sizes can provide an Amazon-like service to their customers. Users can immediately receive quotes, see the nearest distributor and track deliveries in real time. The company also has a partnership with Mercado Libre’s Flex Shipping so that products can be received within an hour.
Matias Lonardi, co-founder and CEO of Treggo, started the company in 2016 together with Nicolas Torchio and Joaquin Wagner.
Speaking about the competition, Lonardi told BestFitnessBands that “ecommerce has been so aggressive here.” Treggo initially worked with all self-employed drivers, but as more and more companies started making last-mile deliveries, the space became overcrowded because the barriers to entry were low.
“Sixty-two percent of the industry is dominated by small and local last-mile providers,” he added.
With everyone trying to break into this industry, the company decided to shift its focus to digitizing the delivery process so that all merchants can have SaaS-like tools to improve their operations. Treggo now works with thousands of last-mile providers and provides retailers with information about the best delivery provider in a given zip code through a single integration and touchpoint.
In addition, it also offers a built-in finance function for its independent driver network to give them cash upfront. Treggo has paid 20% of its sales to drivers over the past six years to buy new vehicles and increase their operational capacity at the company.
Fifty percent of Treggo’s delivery orders come from Mercado Libre, which Lonardi says has been a good partner for the company. The activities in Mexico are still in their first year, but they are growing by 20% monthly and have 70 customers there. In the past six months, Treggo has also started supplying Colombia.
In total, the company works with 378 monthly customers and has delivered 1.8 million orders in the past 12 months, averaging 220,000 packages per month.
Lonardi says the company was looking for funding early on, but noted that the landscape of angel investors wasn’t quite as prevalent six years ago. So the founding group decided to start up the company and did so for four years. Looking to start operations in Mexico in 2020, the company decided to try again and managed to raise $600,000 from a family office with ties to the logistics industry and then another $500,000 in December.
Today, the company announced it has raised an additional $1.7 million it closed two months ago from Newtown Partners (Lonardi said this is the company’s first LatAm investment), Verve Capital, Latin Leap, Bluewatch Ventures, Kube VC and a group of individual investors, including Alan Rutledge, Austen Allred, Matt Brown and Ivan Montoya. This gives Treggo a total of $2.8 million in funding.
That funding gives Treggo a runway to target Mexico more aggressively and start thinking about a future in Brazil, Lonardi said. The company has 70 employees and expects to grow there too.
“The good thing for us is that Argentina was well developed with e-commerce trends, so when we went to Mexico, where it is two or three years behind Argentina, we knew how to scale there,” he added. “Mexico is just getting started and it’s the fastest growing in the world, so there’s a huge opportunity. If you do it right and do your homework, you could be a unicorn in this space.”