Treggo, armed with new funds, takes on crowded Latin American last-mile delivery sector – Nob6
E-commerce across Latin America exploded in the past two years, but against an infrastructure that wasn’t prepared for all of that activity. During this time, startups have taken up the challenge to bolster the infrastructure needed for packages to get to their end destination quickly and cheaper.
That goal has created somewhat of a competitive landscape, especially within the last-mile sector. Treggo, an Argentina-based company, is among companies like 99 Minutos, Cubbo and Cargamos tackling the last-mile deliveries.
In Treggo’s case, developing technology to make urban shipments in Argentina, Mexico and Chile easier and for merchants of any size can provide an Amazon-like service for their customers. Users can receive immediate quotes, see the closest distributor and monitor deliveries in real time. The company also has a collaboration with Mercado Libre’s Flex Shipping to allow products to be received in as soon as one hour.
Matias Lonardi, co-founder and CEO of Treggo, started the company with Nicolas Torchio and Joaquin Wagner in 2016.
Speaking on the competition, Lonardi told Nob6 that “e-commerce has been so aggressive here.” Treggo was initially working with all independent drivers, but when more and more companies got into last-mile deliveries, the space became crowded because the barriers of entry are low.
“Sixty-two percent of the sector is dominated by small and local last-mile providers,” he added.
With everyone trying to break into this sector, the company decided to shift its focus to digitize 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 gives merchants information on the best delivery provider in a certain zip code through one integration and touchpoint.
In addition, it is also providing an embedded finance feature for its independent driver network to give them cash in advance. Treggo paid 20% of its revenue to drivers over the past six years to buy new vehicles and increase their operational capacity with the company.
Fifty percent of Treggo’s delivery orders come from Mercado Libre, which Lonardi says has been a good partner for the company. Its Mexico operations are still in its first year, but it is growing 20% monthly and has 70 customers there. In the last six months, Treggo also started delivering in Colombia.
Overall, the company is working with 378 monthly customers and delivered 1.8 million orders in the past 12 months, moving 220,000 parcels per month on average.
Lonardi says the company attempted to go after funding early on but noted that the angel investor landscape was not as prevalent six years ago. So the founder group decided to bootstrap the company and did so for four years. When they wanted to start operations in Mexico in 2020, the company decided to try again and was successful in raising $600,000 from a family office with ties to the logistics sector and then another $500,000 last December.
Today, the company announced it raised an extra $1.7 million that it closed on two months ago from Newtown Partners (Lonardi said this is the firm’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 some runway to more aggressively target Mexico and to begin thinking of 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 into 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 is the fastest-growing in all the world, so there is a huge opportunity. If you do it right, and do your homework, you could be a unicorn in this space.”