How Techstars, Meta helped profitable LatAm startup Mercately raise a $2.6M seed | TechCrunch

In Latin American countries like Brazil and Chile, messaging platform WhatsApp has become one of the most popular apps to use to buy things online. It was even the e-commerce platform of choice in the region during the pandemic. But WhatsApp is designed to be a messaging platform, not an e-commerce site. A startup called Mercately is building the back-end software to help brands better sell through WhatsApp.

Mercately is a B2B software that builds the infrastructure brands need to sell directly on WhatsApp. The company integrates with platforms like Stripe and HubSpot and uses AI agents to help brands communicate with customers, check inventory, take payments and create purchase orders without the customer having to leave WhatsApp.

Henry Remache, the co-founder and CEO of Mercately, said he got the idea in 2021 while he was doing software development for companies in LatAm. He had a client in Ecuador looking to sell shoes through e-commerce giant MercadoLibre. When Remache discovered this client was doing 90% of its sales through WhatsApp, the lightbulb went on: Brands shouldn’t be looking to launch platforms elsewhere; they should try to sell more where they already are.

“It is fairly unusual for a small or medium company [in LatAm] to have a website; they do all the transactions on WhatsApp,” Remache said. “The behavior is already there; people are using WhatsApp for buying and talking to their family. We are taking the behavior and making it so much easier for these companies to sell where people are.”

Remache said that building the startup wasn’t easy. LatAm is a fragmented market with various different currencies and shipping processes. The company launched in 2022 and currently works with more than 1,000 companies across 20 different countries. Mercately is profitable and has surpassed $1.5 million in annual revenue, he said.

“Over the last two years we have been growing 3.5x year over year,” Remache said. “The growth has been phenomenal. We have only seen more and more businesses implement this kind of system. Companies realize that they need to adapt to consumer behavior instead of trying to use the old methods like a website.”

The startup just raised a $2.6 million seed round led by Inventus Capital Partners and SVQuad with participation from Techstars, Salkantay Ventures and BuenTrip Ventures. Remache said that the capital will go toward hiring more AI engineers to bolster their AI chatbots. It will also go toward trying to build up Mercately’s presence in Brazil and the U.S., countries they operate in already but don’t have strong market share in yet. Remache said that fundraising wasn’t easy.

“First of all, being from Latin America is a little different; there is not that much money over here,” Remache said. “What opened the doors for us is we are a Techstars company. Techstars was definitely a big movement for us.”

The company also did Meta’s “Future of Business Messaging Platform” program in 2022, which is what introduced them to their lead investors, Inventus Capital Partners and SVQuad. Remache said Mercately is both organizations’ first investment into LatAm. Remache added that their lead investors hail from India, another country that heavily uses WhatsApp, which meant they understand how ingrained WhatsApp can be.

WhatsApp has become a hotbed for startups developing on the platform in recent years — especially in LatAm. Just last week, Magie, a Brazilian company that facilitates the ability for its users to send money and pay bills through WhatsApp, raised a $4 million seed round led by Lux Capital — the firm’s first investment in the region. Félix Pago is another that raised a $15.5 million round to facilitate WhatsApp payments earlier this year.

Mercately is not the only company building business services for WhatsApp either. Private equity-backed Infobip is one company that focuses on marketing and customer engagement. Venture-backed Trengo is another focused on communicating with customers over WhatsApp. These companies, or a newcomer, could encroach on Mercately’s market share if they add more business services. Meta, of course, could roll these features out as well.

So many companies are building off of WhatsApp because the app is deeply ingrained in LatAm culture, Remache said. More than 90% of internet users in the region utilize the platform. The U.S. hasn’t seen as high adoption as other regions — but it is growing. Remache hopes Mercately can take advantage of that trend.

“I just think about how Shopify simplified web-based e-commerce in the U.S. We are simplifying WhatsApp commerce in LatAm,” Remache said.