Jüsto, the Mexico City-based, delivery-only grocery store chain, has raised another $12 million in financing as it looks to expand its now pandemically relevant business of “dark stores” across the country.
The COVID-19 pandemic is changing consumer habits and increasing the use of delivery services across the world, and consumers in Mexico are no different.
A recent Nielsen study cited by the company found that 11 percent of respondents had purchased fresh food online for the first time in 2020, as lockdowns in cities across the world restricted movement for everyone but essential workers — with 70 percent of those surveyed saying they’d do it again within the year.
“Despite Covid-19 dramatically accelerating the curve of adoption of e-commerce, the penetration rate of e-grocers is still less than 1 percent,” in Latin America, according to Jüsto founder and chief executive, Ricardo Weder, in a statement. “That means there’s an enormous opportunity—and all the right conditions—to disrupt the grocery industry in Latin America.”
With the new bridge round, Jüsto’s financing has hit just over $20 million in less than a year. Part of that can be attributed to the pedigree of the company’s founder.
Weder was instrumental in Cabify’s growth in Latin America, according to Rodolfo Gonzalez, a partner at Foundation Capital, which led the firm’s investments into Jüsto. Gonzalez also saw the opportunity in the company’s business model.
“We’ve seen that type of model of warehouse and D2C for groceries be very successful in other geographies,” Gonzalez told Crunchbase, when Jüsto announced its previous $10 million seed round. “But that model didn’t quite exist in Mexico yet.”
Other investors in Jüsto’s round include Mountain Nazca, FEMSA Ventures, Quiet Capital, and 500 Startups.
The Mexican company prides itself on selling both local and international brands in categories, including fresh produce, dry goods, personal hygiene and beauty care, home and cleaning goods, beverages, organic food, and pet supplies.
“We have these darkstores and hold the delivery,” says Manolo Fernandez, a spokesperson and member of Jüsto’s founding team. “At traditional supermarkets the fill rates are lower and the product is less fresh. One of our core tenets is to reduce waste. We don’t have fruits and vegetables sitting outside in the store.”
Jüsto also claims that its prices come in at roughly equivalent to those of a regular supermarket. The company has delivery options ranging from express delivery, same day, and next day delivery.
The company isn’t the first startup to look at unused real estate and internet shopping habits and see an opportunity.
Darkstore is a company that has raised nearly $30 million to convert empty space into third-party fulfillment centers. Istanbul’s Getir, which recently raised $25 million from Sequoia’s Michael Moritz, is doing the same thing. And Samokat has adopted a similar strategy in Russia, promising over 3,000 SKUs and an under-45-minute delivery time fulfilled via their urban darkstores.
These companies are focused on being third-party logistics players for delivery rather than creating their own brands, but Jüsto shows that there’s an opportunity for purpose built direct to consumer grocery businesses to use the same infrastructure and create actual brand loyalty.
“We have the technology, talent, and infrastructure to scale our expansion to more cities in Mexico and begin our international expansion, beginning with Colombiam” Weder said.
