Social commerce startups are raising fresh capital to further scale their business in the Latin American region

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The social commerce sector has gained increasing prominence in Latin America over the last few years. As the popularity of social shopping continues to grow among consumers, social commerce is expected to make further inroads in the region, when compared to traditional e-commerce. Group buying and the availability of various payment options are among the factors that are driving the growth of the social commerce market in Latin America.

With the sector projected to record further growth over the next three to four years, social commerce startups in the region are raising funding rounds to scale businesses and drive growth. For instance,

• In October 2022, Elenas, a Colombia-based social commerce platform, announced that the firm had raised US$20 million in a Series B funding round, bringing its total funding to US$28 million, to date. Notably, the social commerce platform has partnered with 100,000 women in Colombia and Mexico. In partnership with Elenas, these women sellers had sold over 2 million orders and earned millions in commissions.
• While the firm is based in Colombia, Mexico is poised to become the largest market for Elenas. Since its launch in Mexico in 2021, more than a third of its business has come from the country. The Series B investment will assist the firm in further scaling its seller network in both markets. Furthermore, the firm is also expected to invest in product development for both sellers as well as providers.

Before raising US$20 million in a Series B round, the firm also raised US$6 million in a Series A round. Notably, between the Series A and Series B rounds, the firm recorded revenue growth of 5 times. PayNXT360 expects the firm to further drive its revenue growth over the next few quarters. Along with Elenas, other social commerce startups have also raised funding rounds in 2022. For instance,

• In March 2022, Trela (formerly known as Zapt), another Latin America-based social commerce startup, announced that the firm had raised US$25 million in a Series A funding round, which was led by SoftBank Latin America. Notably, the firm operates in Brazil and is expected to use the capital to further scale its operations across the country by the end of 2022.
• The social commerce startup has introduced a group buying feature, which empowers consumers with better bargaining power. As of now, the firm is focusing on the grocery sector and has recorded strong growth since its inception in 2021. Since raising the seed round in April 2021, the firm recorded revenue growth of 30 times, as of March 2022.
• Muni, another Colombia-based social commerce, has a similar business model as that of Trela in Brazil. Notably, Muni also raised US$20 million in a Series A funding round, which was led by Lightspeed Ventures Partners. The firm is planning to use the capital to further accelerate its growth in the Latin American markets. Along with Colombia, Muni also has presence in Mexico and Brazil. The firm offers more than 6,000 SKUs across 20 categories, which include groceries and electronics. As of March 2022, the firm had amassed 40,000 customers across its markets.

As social commerce continues to grow and evolve, PayNXT360 expects more and more startups to emerge over the next three to four years in the Latin American region. Furthermore, as the popularity of group buying and social buying continues to grow among shoppers in the region, PayNXT360 expects these firms to further expand their business and enter into product categories. This will create more investment opportunities for global venture capital and private equity players that are looking to capitalize on the growing social commerce space in Latin America.

To know more and gain a deeper understanding of the Latin American social commerce industry, click here.