Business

Logistics startup Kangu raises $1.28 million aiming expansion in Brazil

Seed investment will be used to start operation in several Brazilian state capitals

Kangu wants to improve and streamline ecommerce logistics in Brazil, a market valued at BRL 20 billion. Photo: Kangu
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  • Kangu currently has over 700 “Kangu points” in São Paulo and serves around 400 ecommerce firms;
  • The company offers an integrated network of drop-off and pick-up points for online retail.

Kangu, a Brazilian network of drop-off and pick-up points for ecommerce, raised BRL 6 million ($1.28 million) in a seed investment round aiming the expansion of its business in Brazil. The investment was led by NXTP Ventures, and Argentina-based venture capital fund, which was joined by angel investors (including Américo Pereira Filho, a former chief executive in FedEx Brazil)

Kangu’s model offers a vertically integrated network of physical sites for ecommerce, connecting online sellers, merchants, third-party logistics providers (3PLs), and end consumers in a single platform. The company currently has over 700 “Kangu points” in São Paulo and serves around 400 ecommerce operations, from small retailers to major players in the segment.

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Kangu does not own or operate its points, rather establishing partnerships with local small store owners and using their physical locations as places to drop off and pick up packages as well as to offer additional services. For the storekeeper, one advantage of the deal is an increase in the flow of people circulating in his or her shop; for Kangu, the model allows rapid expansion with somewhat low costs.

According to Brazil Journal, the startup also gives small shops access to large logistics operators such as Sequoia and Uello, making them less reliant on Correios, the state-controlled postal service company.

“The insight we had was that there was already a logistics infrastructure in big cities. What was missing was a way to integrate it into the chain and do all management”, Ricardo Araújo, Kangu’s  co-founder, told Brazil Journal. 

Headquartered in Sao Paulo, Kangu was founded in March 2019 by Ricardo Araújo, Marcelo Guarnieri and Celso Queiroz, all experienced logistics executives at Rapidão Cometa, a 3PLs operator in Brazil that was sold to FedEx. With the money recently raised, the company plans to start operations in Brazilian state capitals Rio de Janeiro, Belo Horizonte, Porto Alegre, Florianópolis and Vitória by the end of this year.

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$4 billion market

E-commerce logistics is a large market in Brazil, currently sized at BRL 20 billion ($4.29 billion) growing 15% per year, as consumer adoption of online retail is rapidly increasing – less than 5% of retail sales are made online in the country. In addition, e-commerce companies face considerable challenges today streamlining their logistics operations as traditional urban logistics networks have been slow to adapt to the demands of digital commerce.