BenjamÃn GarcÃa knows what he wants: to create a network of providers in Houston, Texas, which allows him to gradually grow in the United States. But the co-founder of the Chilean startup WherEx, which makes a digital tool available to companies to purchase supplies, first has to go through Mexico.
It will do so with a $ 7 million investment that it obtained from the Kayyak Ventures venture capital fund. A Series A financing round, in which FJ Labs, Jaguar Ventures, Tuesday Capital and Wayra, which belongs to Telefónica’s innovation area, also participated.
For the startup, beginning its expansion in the Mexican market represents a great area of opportunity. Not only because of its geographical location, but also because of the number of SMEs it has. Its strategy consists of offering them the possibility of accessing a list of more than 20,000 suppliers, with the intention that they can compare the prices of different inputs from sectors such as construction, consumption, aquaculture, manufacturing, and acquire them at a competitive price.
Buyers, GarcÃa details, obtain greater control in their merchandise acquisition processes, since the WherEx platform uses artificial intelligence to be a commercial solution for quotations and bids for industrial services.
The businessman trusts that his business model and the shortage of supplies that occurred due to COVID-19 will be an interesting springboard to achieve his goal. Each supplier that joins the network does not pay any fees during the first 18 months, after which they give a sales commission of 0.4%.
WherEx arrived in Mexico this year. The first three months the platform was an intermediary to close 20 million dollars in transactions, and by the end of 2021 it estimates to reach 240 million dollars and establish alliances with 60 corporate clients. Having achieved this, he plans to make the move to the United States in 2022, a market that, according to GarcÃa, has around 60,000 potential clients.
It all started with the sale of salmon …
WherEx emerged in 2016, in Puerto Varas. “A town in southern Chile that is like the salmon capital of the world,” he says. Felipe Manterola, co-founder of the startup, realized that there was a need to digitize the supply processes, since salmon exporting companies found it difficult to connect with more suppliers.
So he started the business in the aquaculture and fisheries sector, under the initial name of Aqmarket. In one year, it created a base of 2,000 suppliers, and by the end of 2020 GarcÃa had already got on the boat and together they connected with more than 100 companies and entered the Peruvian and Colombian market to meet the demand in more sectors.
Data from the firm indicate that during the pandemic, WherEx grew 220% and recorded $ 720 million in transactions. GarcÃa points out that, until then, they did not have the need to look for an investment fund, since the initial growth was solved with the support of family and friends.
In addition, 75% of the providers they currently have comes from information shared by the same clients. The remaining 25% have achieved it through an operations team that does internet search and ‘knock on doors’ work.
On average, each WherEX customer buys about $ 8 million worth of industrial products and services on the platform. Savings on purchases are up to a million dollars a year, GarcÃa points out.
“By the end of the year, a 300% growth in transaction amounts is projected in Peru, Colombia and Mexico. The largest percentage will come from the Mexican market, due to its size and the many business opportunities it offers. And in 2022 we hope to reach 2,000 million dollars in transactions, “he adds.
Impacts of the pandemic
COVID-19 has impacted all industries, either positively or negatively. Héctor Márquez Pitol, director of institutional relations for the recruiting company Manpower Group, points out that the recovery of employment is not alien to the development of the sectors.
According to data from the firm, for the third quarter of the year, the labor market and the strongest growth is expected in Agriculture and Fisheries, which reports a Net Employment Outlook of 11%. Likewise, the hiring intentions are favorable for Manufacturing, Mining and Extraction and Communications and Transportation, with an increase of 10%.
On the other hand, Commerce estimates some increases in workers during the period from July to September, at least 9% at the national level, while Construction projects a hiring of 8%, especially in the northwest of the country with a trend of 16 %. Most of these industries are where the Chilean startup has its eyes.
