In Latin American countries like Brazil and Chile, the messaging platform WhatsApp has become one of the most popular apps to use to buy things online. It was even an e-commerce platform. WhatsApp has been a favorite in the region during the pandemic. But WhatsApp was designed to be a messaging platform, not an e-commerce site. A startup called Mercately is building a back-end program to help brands sell better on WhatsApp.
Mercatelli It’s a B2B software that builds the infrastructure brands need to sell their products directly on WhatsApp. The company integrates with platforms like Stripe and HubSpot and uses AI agents to help brands connect with customers, check inventory, take payments, and create purchase orders without the customer having to leave WhatsApp.
Henry Rimache, Mercatly’s co-founder and CEO, said he came up with the idea in 2021 while working in software development for companies in Latin America. He had a client in Ecuador looking to sell shoes through e-commerce giant Mercadolibre. When Rimache discovered that the client was making 90% of its sales through WhatsApp, a new idea dawned on him: Brands shouldn’t look to launch platforms elsewhere; they should try to sell more where they already exist.
“It’s somewhat unusual for a small or medium-sized company. [in LatAm] “They do all their transactions on WhatsApp,” said Remache. “The behavior is already there; people use WhatsApp to make purchases and talk to their families. We’re taking that behavior and making it much easier for these companies to sell their products where people are.”
Building the startup wasn’t easy, Rimach said. Latin America is a fragmented market with different currencies and shipping processes. The company launched in 2022 and currently works with more than 1,000 businesses in 20 different countries. He said Mercately is profitable and has surpassed $1.5 million in annual revenue.
“Over the past two years, we’ve grown 3.5x year-over-year,” said Remach. “The growth has been phenomenal. We’ve seen more and more companies implement this type of system. Companies are realizing that they need to adapt to consumer behavior rather than trying to use old-fashioned methods like a website.”
The startup just raised $2.6 million in a funding round led by Inventus Capital Partners and SVQuad, with participation from Techstars, Salkantay Ventures and BuenTrip Ventures. Rimach said the capital will go toward hiring more AI engineers to enhance its AI chatbots. It will also go toward trying to build Mercately’s presence in Brazil and the U.S., countries where it already operates but doesn’t have a strong market share yet. Raising the money wasn’t easy, Rimach said.
“First of all, being from Latin America is a little bit different; there’s not a lot of money here,” Rimach said. “What opened the doors for us is that we’re a Techstars company. Techstars was definitely a big step for us.”
The company also took part in Meta’s Future Messaging Platform for Business program in 2022, which introduced them to their lead investors, Inventus Capital Partners and SVQuad. Mercately is the first investment by the two organizations in Latin America, Rimache said. The lead investors are from India, another country that uses WhatsApp heavily, Rimache added, which means they understand how entrenched WhatsApp is.
WhatsApp has become something of an incubator for startups developing the platform in recent years — particularly in Latin America. Just last week, Maggi, a Brazilian company that makes it easy for its users to send money and pay bills through WhatsApp, raised a $4 million seed funding round led by Lux Capital — the company’s first investment in the region. Felix Pago is another company that raised a $15.5 million funding round to facilitate WhatsApp payments earlier this year.
Mercately isn’t the only company building commerce services for WhatsApp. PE-backed Infobip is one, focusing on marketing and customer engagement. VC-backed Trengo is focused on connecting with customers on WhatsApp. These companies, or any new ones, could eat into Mercately’s market share if they add more commerce services. Of course, Meta could roll out those features as well.
Many businesses rely on WhatsApp because the app is deeply ingrained in Latin American culture, Rimach said. 90% of internet users In the region, people are using the platform. The US has not seen the same high adoption rate as other regions — But it growsRemach hopes Mercatly can capitalize on this trend.
“I just think about how Shopify simplifies e-commerce on the web in the US, and we’re working on simplifying WhatsApp commerce in Latin America,” Rimach said.