Mexican startup Jüsto raises a $12 million bridge round to boost its expansion. Image: Jüsto/ Courtesy
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Mexican online grocery business Jüsto raises $12 million in a new round

Founder and CEO Ricardo Weder says that the company saw a 500% increase in demand during the pandemic. The next step is to expand across Mexico and Colombia

Amid a spike in demand for food delivery apps since the beginning of social isolation measures against the spread of the new coronavirus, Mexico-city based online supermarket Jüsto saw its operations grow 65% per month. And now, the company counts on an extra $12 million infusion to boost this expansion, through a new bridge round led by funds Foundation Capital, Mountain Nazca, FEMSA Ventures, Quiet Capital, and 500 Startups.

“Jüsto’s main core is to pick fresh products,” tells me founder and CEO Ricardo Weder. “The most complex operation is the one that works with fresh products. And we begin with the hardest problem, competing against the big titans of the supermarket industry.” Unlike online grocery apps that have started expanding product-portfolio to a wide range of different items, Jüsto is fully focused on groceries. And this is their power and craft. 

Delivery-only grocery startup Jüsto, the Spanish term for fair, raised a total amount of $22 million in investments in less than one year. Photo: Jüsto/ Courtesy.

Holding an end-to-end control of the operation, the online grocery business works exclusively with delivery, with the so-called dark stores, a business model that started to gain ground in recent years and dismisses a storefront to focus on online ordering, fresh food, and fast delivery. 

Our mission is to become Latin America’s favorite supermarket

Ricardo Weder, founder and CEO at Jüsto.

Jüsto offers categories such as fresh produce, dry goods, organic food, home, and personal items. As for the distribution, the startup allows consumers to choose among express, same day and next day delivery. “I have to say that last-mile delivery options and e-commerce in Mexico have improved a lot in the past years, to be honest. I believe it’s no longer an issue now, as it used to be 3, 4, or 5 years ago.”

With $22 million raised in less than one year, Weder says that the company saw a 500% increase in demand during the pandemic. “Right now we are seeing a normalization, but we saw the pandemic accelerating the adoption of e-commerce in Mexico at least by 4,5 years,” he highlights. It’s a big opportunity for e-commerce, but of course, the competition has increased a lot.”

And one of the sector’s titans mentioned by the executive is Walmart Mexico. In this year’s first quarter, the Mexican division of the retail giant announced a 15.7% YoY growth in earnings, reaching as much as MXN 19.1 billion. Walmex opened 3 new unities in the country in Q1 and between March and May, saw its e-commerce sales grow by the threefold driven by Mexico’s most popular shopping date, Hot Sale. Currently, Walmart Mexico’s market capitalization is around $44 billion, according to Yahoo Finance. “That’s the size of the opportunity,” Jüsto CEO points out. “But we have the speed and the talent to develop our technology and to gain competitiveness day by day.”

To tackle the competition, Jüsto is backed by a skilled team, starting with Weder, a former important piece to the expansion of ride-hailing firm’s Cabify. “The previous experience in Cabify helped a lot. I learned from mistakes I’ve made, and now we are able to apply this at Jüsto,” he tells. “I’d dare to say we have the most experienced team in Latin America.”

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Coming next: Colombia

Boosted by the latest funding, Jüsto is now aiming at a new target: Colombia. “We are beginning to expand to other cities in Mexico and soon we are also going to start our expansion in Latin America, first to Colombia, where there’s a huge opportunity.” Weder explains that the ecosystem and the penetration of online grocery in both countries are very much alike. “And we also have strong partnerships with very important players in the country that will leverage a lot our launching,” he reveals, without disclosing the names of these partners. 

According to a survey held by market intelligence platforms AMI and EchoMR about the new habits of online consumers amid the pandemic in Latin America, 20% of Colombians and Mexicans made their first e-commerce transaction during quarantines.

Despite Covid-19 dramatically accelerating the curve of adoption of e-commerce, the penetration rate of e-grocers is still less than 1% in Latin America. There are an enormous opportunity and all the right conditions to disrupt the grocery industry in the region.

RICARDO WEDER, FOUNDER AND CEO AT JÜSTO.

Although without revealing when exactly Jüsto will kick-off the expansion to Colombia, Weder says that Chile, Peru, and even Latin America’s major economy Brazil are on the company’s roadmap. “We believe in a long-term relationship with consumers, rather than transactional. That’s why we are a pure player, fully integrated, vertical, online supermarket.”