Jüsto, the online grocer located in Mexico City, is still firing on all cylinders in order to saturate the Latin American market. The firm claims to be Mexico’s first supermarket without a physical presence, allowing consumers to order goods straight through its website or app, with Jüsto delivering the order to the customer’s preferred location. We previously covered the firm when it secured $65 million in a Series A round headed by General Atlantic in February of last year. CEO Ricardo Weder told TechCrunch at the time that the firm, which was formed in 2019, had fared well in the first year of the worldwide pandemic, with sales in 2020 increasing 16-fold.
Weder intended to use the Series a money to grow across Mexico and Latin America — a market he estimated to be worth $600 billion — and the firm achieved exactly that. “In terms of supermarket acceptance in Latin America, the worldwide pandemic aided a lot,” he noted. “It was 1% before, and now it’s 3% and expanding rapidly.” Jüsto went “gangbusters,” increasing five times in Mexico and attaining a 99.4 percent fulfillment rate in the last 12 months, thanks to those few percentage points of adoption. It already has over 100,000 customers in each of its markets, with Weder anticipating millions by the end of the year.
After purchasing local e-grocer Freshmart late last year, it entered the Peruvian market and has since announced the establishment of its first physical shop in Lima to offer a hybrid grocery model. It also introduced Ekonofresh, a bargain online supermarket that complements its Freshmart offering and gives customers even more options.
The firm also began in Brazil last October in So Paulo, where it has witnessed continuous growth of 30 percent to 40% month over month, and the area now accounts for 25% of Jüsto’s overall income, according to Weder. Other cities being considered for expansion include Belo Horizonte, Rio de Janeiro, Porto Alegre, and Curitiba. Weder expects to be able to expand into 20 more cities over the following few years.
A fresh round of finance, this time $152 million in Series B capital led by General Atlantic, is supporting the company’s further development. Tarsadia Capital, Citius, Arago Capital, Foundation Capital, and Quiet Capital were among the new and current investors in the round, bringing Jüsto’s total venture capital investment to over $250 million. “We feel we have a mature value offer right now,” Weder added, “particularly as our operations increase quickly and we develop the technology to scale up operations.” “We are Latin America’s premier supermarket, and we regard the biggest corporations, such as Walmart, as rivals, so there are still things we can do to grow our market share.” Infrastructure is a priority for grocery shops, and Jüsto is following suit.”
Weder is also keeping an eye on Colombia and Chile, and is considering whether the best time is to enter those countries, either directly or through acquisitions, like Jüsto did in Peru. Fruits, vegetables, proteins, and cleaning goods are the company’s primary categories, with between 7,000 and 8,000 SKUs. Depending on the city, this is an increase of around 2,000 SKUs over last year. Jüsto’s next priority is to continue personalizing its products in each city. As the firm continues to focus on sustainability and waste reduction, it is also creating ties with small and medium farmers to buy directly from them.
Meanwhile, by 2024, the online grocery sector in the United States is expected to be worth $187.7 billion, up from $95.8 billion in 2020. Incumbents such as Walmart, Instacart, and DoorDash dominate delivery, but delivery startups all around the world are succeeding in attracting venture money. Rino, for example, raised $3 million to deliver groceries in Vietnam, Bokksu is now valued at $100 million after raising $22 million, JOKR and Gorillas have billion-dollar valuations (in Gorillas’ case, billions), and Egypt’s Breadfast and Appetito, as well as India’s Zepto, have all raised money in the last six months.
It’s evident that the grocery delivery sector has a lot of movers and shakers, but it’s also a difficult one. Zero Grocery closed operations last month, about a month after I announced they raised $12 million, according to BayArea Inno. “Fundraising has always been the toughest fight we have faced,” the firm wrote on Facebook. Unfortunately, we’ve lost the war.” Weder agreed that grocery delivery is “not simple, especially on the operational side,” and that it becomes much more difficult as a business expands. That’s why Jüsto has emphasized the entire basket strategy, with the objective of customers completing all of their shopping through the firm rather than just a few convenience items, he explained.
According to Zeev Thepris, vice president of General Atlantic, he has seen both the rapid commerce and full basket models in Latin America, and while delivery is difficult to set up, he believes the full basket technique is a superior way to get to good unit economics. “It’s not about convenience,” Thepris said, “but about individuals buying once a week with an order ticket of $100 to $150 against $15 to $20 for convenience purchases.” “It’s because of this that unit economics works.”