WHY WE INVESTED
The platform connecting global sellers to Latin America’s $86 billion consumer market
Nocnoc instantly connects global sellers to LatAm’s network of e-commerce marketplaces. And then it helps them succeed.
It didn’t take long for Diego Szilagyi, Joaquin Colella, and Ilan Bajarlia — who worked together on the founding team of dLocal, an Uruguay-based unicorn fintech that connects global merchants to emerging markets across APAC, the Middle East, Latin America, and Africa — to realize there was a massive untapped opportunity in Latin America.
The largest growing region for e-commerce in the world, Latin America has an $86 billion consumer market and online retail sales expected to hit $160 billion by 2025. At the same time, less than 4 percent of all goods sold across Latin America’s e-commerce marketplaces today come from merchants outside the region. That’s because cross-border sellers face myriad challenges when breaking into Latin America, including ever-changing customs regulations, international shipping and payments barriers, and a lack of local customer support, to name just a few.
Having worked closely with global merchants from China, Europe, and the US during their time with dLocal, Szilagyi, Colella, and Bajarlia understood the logistical challenges that needed to be solved to make cross-border e-commerce possible. The co-founders started approaching global marketplaces, connecting large e-commerce players from China selling everything from toys and clothing to electronics and home appliances to LatAm markets. But after a few months, they saw an opportunity in helping smaller online sellers connect and sell through marketplaces in Latin America.
The first challenge they decided to tackle was giving global online sellers access to Brazil, the largest market in LatAm. Unlike the US, where Amazon is the major online marketplace, Brazil has half a dozen top marketplaces that sellers must break into in order to reach a significant amount of consumers. Add to that at least another 10 marketplaces in order to gain 80 to 90 percent of the market share in Brazil alone. For sellers attempting to sell in other LatAm countries on top of that, the roster of marketplaces they need to break into quickly becomes unwieldy. “Global sellers don’t have the time to open relationships in all these different markets,” says Bajarlia.
While marketplaces in China, the US, and Europe are already selling cross-border, sellers themselves are focused on local logistics and payments, not the global market, which requires various integrations, contracts, global logistics, customs clearance, and customer support in different languages. What’s more, sellers need an understanding of the markets they are entering. They need to know, for example, how a final consumer in, say, Mexico City would find their product on Google or Facebook and easily buy it locally. Until Nocnoc launched in 2018, doing so successfully was virtually impossible for small local sellers around the world.
NocNoc offers a way for global sellers to circumvent those challenges. Sellers simply upload their items to Nocnoc, then the platform does the rest — it publishes items in its own megastores, manages product listings across multiple marketplaces, and adds shipping costs, taxes and any commissions. Once a purchase is made, Nocnoc manages all communications with customers, including logistics once the seller sends goods to designated warehouses in China, Hong Kong, and the US. Nocnoc also manages last-mile delivery in LatAm, making sure products end up in the right hands. By boosting global seller product placement, handling logistics and customer service, and serving as an end-to-end partner to SMEs and consumers, it offers a way into this vast market that previously had far too many barriers to entry.
To make this happen, the founders of Nocnoc had to create a platform that connects both sides of the market in real-time. They had to hash out the intricacies of cross-border payments, translations, local native customer support, and maximizing product exposure and conversation rates, understanding in detail the characteristics of each individual market…and then NocNoc addresses the logistics of freight, fulfillment, customs, and last-mile delivery. “At the end of the day, the concept is connecting the dots. You have 12 million global sellers in just the US and China. Then you have 30 to 40 relevant marketplaces in LatAm,” says Bajarlia. “Our platform needs to be connected to both sides of the market.”
The platform also computes algorithmic relevance, analyzing all products applying to the marketplace to determine which market each one would be most relevant in, how to price it, and what title should be put on it depending on where it’s being sold. “We are talking about millions of SKUs of products, connecting thousands of sellers with millions of consumers,” says Bajarlia. “You have a lot of integrations in real-time that you have to manipulate.”
Colella, Nocnoc’s CTO, built the platform from scratch and the team has been scaling ever since. While the company had a team of eight just a year ago, today it has 60 employees and plans to double in size by the end of 2022. Nocnoc has integrated with 17 marketplaces to date — including Mercado Libre, Via, Americanas and Walmart — and provides these sellers with access to more than 435 million digital buyers across Latin America.
When signing up, sellers choose between an English or Chinese version of the platform and add in basic information about their business. Nocnoc then runs a check on each seller and within 24 hours, if approved, they can begin selling across 17 marketplaces across three to four markets.
“We have connected the dots of different players,” says Bajarlia. “We are talking about the largest growing region for e-commerce in the world that we are opening up for them.”
Quona led NocNoc’s $7 million seed round in March 2022 alongside Mouro Capital. Other investors in the round include Caravela, Olist, and Broadhaven, as well as angel investor Diego Dzodan (Facily founder and CEO) and Flavio Dias (former CEO of Walmart Brazil and VIA).
Disclaimer: Quona portfolio companies were selected for profiles based on objective, non-performance-based criteria for the purpose of illustrating the types of investment made by Quona funds and their impacts. These profiles are being provided for illustrative purposes only, in order to provide examples of the idea generation, research, and thought process of Quona investment teams. No representation is made as to whether or if the investment ideas represented in these profiles have been or will be profitable. It should not be assumed that Quona will be able to identify similar investment opportunities in the future, or that any such opportunities will be profitable. The above statements include the opinions of the Firm and are for illustrative purposes only. There is no assurance that any trends depicted or objectives described in Quona profiles will continue or become successful.
