In Latin American countries like Brazil and Chile, messaging platform WhatsApp is one of the most used apps for buying goods online. It has also been the region's preferred e-commerce platform during the pandemic. But WhatsApp was designed as a messaging platform, not an e-commerce site. Startup Mercately is building back-end software to help brands sell more effectively through WhatsApp.
Mercately is a B2B software that builds the infrastructure needed for brands to sell directly on WhatsApp. The company integrates with platforms like Stripe and HubSpot and uses AI agents to enable brands to communicate with customers, check inventory, take payments, and create purchase orders without customers ever leaving WhatsApp.
Mercatori co-founder and CEO Henry Remash said he came up with the idea while developing software for Latin American companies in 2021. He had a client in Ecuador who wanted to sell shoes through e-commerce giant MercadoLibre. Remash learned that 90% of the client's sales were through WhatsApp, and he had an idea: Instead of trying to launch the platform elsewhere, brands should try to sell more in the places they already sell.
“That's pretty unusual for a small business. [in LatAm] “Having a website is very difficult for businesses. They do all their transactions on WhatsApp,” Remash said. “These habits are already there. People use WhatsApp to shop and talk to their families. We're embracing those habits and making it much easier for these businesses to sell where people are.”
Lemash said launching the startup wasn't easy. Latin America is a fragmented market with different currencies and delivery processes. The company was founded in 2022 and now works with more than 1,000 companies in more than 20 countries. Mercatori is profitable, with annual revenue exceeding $1.5 million, he said.
“For the past two years, we've seen 3.5x year-over-year growth,” says Remash. “The growth has been phenomenal. More and more companies are implementing these types of systems. They're realizing that they need to adapt to consumer behavior instead of using old methods like websites.”
The startup just raised $2.6 million in a seed round led by Inventus Capital Partners and SVQuad, with participation from Techstars, Salkantay Ventures and BuenTrip Ventures. Remache said the money will be used to hire more AI engineers to strengthen the AI chatbot. It will also be used to grow its presence in Brazil and the U.S., where Mercately already operates but hasn't yet captured significant market share. Remache said raising the money wasn't easy.
“First of all, it's a little different coming from Latin America. There's not as much money here,” Lemash said. “The doors opened for us because we were part of Techstars. Techstars was definitely a big movement for us.”
The company also participated in Meta's “Future of Business Messaging Platforms” program in 2022, where it met lead investors Inventus Capital Partners and SVQuad. Remash said Mercately is the first investment in Latin America for both organizations. The lead investors are from India and are heavy users of WhatsApp, so they understand how ingrained WhatsApp is, Remash added.
WhatsApp has become a hotbed of startups building on the platform in recent years, especially in Latin America. Last week, Magie, a Brazilian company that lets users send and receive money through WhatsApp, raised $4 million in a seed round led by Lux Capital, its first investment in the region. Another company, Félix Pago, raised $15.5 million earlier this year to enable payments on WhatsApp.
Mercately isn't the only company building business services for WhatsApp. Private equity-backed Infobip is one company focused on marketing and customer engagement. Venture capital-backed Trengo is another company focused on communicating with customers over WhatsApp. If these companies, or new entrants, add more business services, they could eat into Mercately's market share. Of course, Meta could also roll out these features.
Many companies base their operations on WhatsApp because the app is deeply rooted in Latin American culture, Remash said. More than 90% of internet users in the region use the platform. In the U.S., adoption isn't as high as in other parts of the world, but it's growing. Remash hopes Mercatori can capitalize on that trend.
“Think about how Shopify simplified web-based e-commerce in the U.S., and we're simplifying commerce for WhatsApp in Latin America,” Lemash said.