Advent, SoftBank invest in Latin America’s Merama at $850m valuation

New investor Globo Ventures, the venture arm of the Brazil-based media conglomerate, and existing investors Monashees, Valor Capital, Balderton Capital and MAYA Capital also participated in the financing.

Advent and SoftBank have co-led an all-equity Series B funding round of $225 million in Merama, an acquirer and builder of direct-to-consumer businesses in Latin America. The transaction is the largest Series B round ever raised in Latin America.

PRESS RELEASE

MEXICO CITY and SÃO PAULO, September 28, 2021 – Less than five months after closing its Series A round, Merama, the leading acquirer and builder of direct-to-consumer businesses in Latin America, has raised an additional US$225 million in Series B funding at a valuation of approximately US$850 million. The all-equity round was co-led by Advent International (“Advent”) and SoftBank Group (“SoftBank”), two of the world’s largest private equity firms, and is the largest Series B round ever raised in Latin America.[1]

New investor Globo Ventures, the venture arm of the Brazil-based media conglomerate, and existing investors Monashees, Valor Capital, Balderton Capital and MAYA Capital also participated in the financing, which was more than three times oversubscribed.

“This new financing from some of the world’s premier investors is a strong affirmation of Merama’s business model, momentum and the size of the market opportunity,” said Sujay Tyle, co-founder and CEO of Merama. “We are pleased to welcome Advent, SoftBank and Globo Ventures as new partners alongside our existing investors and believe their deep experience building businesses in both Latin America and e-commerce will benefit Merama significantly.”

Advent is a core investor in Thrasio, the largest acquirer of Amazon FBA brands globally, while SoftBank has invested in several of Latin America’s largest online platforms and retailers such as Rappi, Petlove and Olist.

Differentiated business model

Founded in December 2020 with dual headquarters in Mexico City and São Paulo, Merama invests in and helps operate and exponentially grow the largest, mainly online, brands originating in Latin America. The company typically acquires a majority stake, allowing the founders to retain ownership and continue operating the businesses while supporting them with its team of e-commerce experts and working capital funding. Merama aggressively expands the brands across Latin America and the U.S. and promotes each brand individually to enhance their direct-to-consumer capabilities. It is also building a unique suite of technology tools not available from any other competitor in Latin America to power and automate the brands.

To date, Merama has acquired stakes in more than 20 brands operating in Mexico, Brazil, Chile, Peru, Colombia and the U.S. Together these businesses are expected to generate over US$250 million of revenue in 2021 and are highly profitable. The company has dozens of additional brands in its pipeline but is highly selective in the businesses it chooses to partner with.

“The new capital from the Series B round will enable us to pay down debt more rapidly, partner with more great businesses, finish building our technology platform and provide working capital to existing brands,” said Felipe Delgado, co-founder and CFO of Merama. “With the support of Advent, SoftBank and our entire investor base, we look forward to continuing our rapid growth and solidifying our position as the leading e-commerce aggregator in Latin America.”

Latin America: The fastest-growing e-commerce region globally

The growth of e-commerce in Latin America—both in absolute terms and as a percent of total retail sales—has outpaced all other regions worldwide.[2] The Latin American market is estimated at US$67 billion and growing 24% a year due to the low penetration of online sales (9% in Latin America versus 20% in the U.S.).[3] Brazil and Mexico were the second- and fifth-fastest-growing e-commerce markets globally in 2020.[4]

”E-commerce in Latin America is growing exponentially, creating enormous opportunities for leading builders of online brands like Merama,” said Renato Andrade, co-founder of Merama. “We have strong conviction in our differentiated model of collaborating with founders to grow a select number of the best brands into de facto category leaders.”

In conjunction with the Series B financing, Wilson Rosa, Head of Retail and Consumer Investing for Advent in Latin America, and Paulo Passoni, Managing Partner of SoftBank Latin America, will join Merama’s board of directors. Alex Szapiro, Operating Partner and Head of Brazil for SoftBank Latin America and former General Manager of Amazon Brazil, will join the board as an observer.

“This financing round will enable Merama to continue its accelerated growth in a large, underpenetrated and highly fragmented market,” said Brenno Raiko, Head of Technology Investing for Advent in Latin America. Wilson Rosa added, “Merama has a solid founding team with proven M&A capabilities and a relentless focus on building value in the brands through sales channel and supply chain optimization, marketing, international expansion and other levers. We look forward to partnering with Sujay, Felipe, Renato and the rest of the team to drive the company’s continued development and expansion.”

Paulo Passoni said, “Led by an exceptional team, Merama has quickly begun building a select portfolio of leading online brands in the rapidly expanding Latin American e-commerce market. We are thrilled to partner and support their mission to remove merchant’s traditional barriers to scale, building category leaders throughout the region.”

Advent and SoftBank both bring significant local-market knowledge and sector expertise to the partnership with Merama. Advent is one of the leading and longest-established private equity firms in Latin America, having invested more than US$7 billion in 67 companies across the region over the past 25 years. It also has significant experience in the e-commerce, fintech and payments sectors, with recent investments including Thrasio, Nubank, the world’s largest independent digital bank, and EBANX, the leading cross-border commerce platform in Latin America. SoftBank, known internationally for its global Vision Funds, has a dedicated US$5 billion Latin America Fund I and recently announced the US$3 billion Latin America Fund II.

[1] LAVCA – The Association for Private Capital Investment in Latin America

2 eMarketer, Latin American eCommerce 2019, June 27, 2019

3 Euromonitor, July 2021

4 eMarketer, Latin American eCommerce Forecast 2021, July 14, 2021

About Merama

Founded in December 2020, Merama is the leading consolidator of direct-to-consumer businesses in Latin America. The company invests in and helps operate and scale category-leading online merchants selling on marketplaces such as Mercado Libre, Amazon and Shopee. To date, Merama has acquired ownership stakes in more than 20 businesses offering consumer products across a diverse range of categories. The company was co-founded by CEO Sujay Tyle, co-founder and former CEO of Frontier Car Group (sold to Naspers for approximately US$700 million); Felipe Delgado, previously CEO of Beetmann Energy; Olivier Scialom, co-founder and former COO of Petsy (sold to Maskota); Renato Andrade, previously Associate Partner at McKinsey; and Guilherme Nosralla, former Head of Marketing at Wildlife Studios. Merama has more than 100 employees in Mexico City and São Paulo, bringing together relevant experience from leading technology and e-commerce companies such as Uber, Facebook, Google, Amazon, Falabella, and Mercado Libre. For more information, visit www.merama.io.

About Advent International

Founded in 1984, Advent International is one of the largest and most experienced global private equity investors. The firm has invested in over 380 companies across 42 countries, and as of June 30, 2021, had US$81 billion in assets under management. With 14 offices in 11 countries, Advent has established a globally integrated team of over 245 investment professionals across North America, Europe, Latin America and Asia. The firm focuses on investments in five core sectors, including business and financial services; healthcare; industrial; retail, consumer and

leisure; and technology. After more than 35 years dedicated to international investing, Advent remains committed to partnering with management teams to deliver sustained revenue and earnings growth for its portfolio companies. For more information, visit www.adventinternational.com or www.linkedin.com/company/advent-international.

About SoftBank Group

The SoftBank Group invests in breakthrough technology to improve the quality of life for people around the world. The SoftBank Group is comprised of SoftBank Group Corp. (TOKYO: 9984), an investment holding company that includes stakes in telecommunications, internet services, AI, smart robotics, IoT and clean energy technology providers; the SoftBank Vision Funds, which are investing more than US$135 billion to help extraordinary entrepreneurs transform industries and shape new ones; the US$5 billion SoftBank Latin America Fund, the largest venture fund in that region; the newly-launched US$3 billion SoftBank Latin America Fund II; and the SB Opportunity Fund, a US$100 million fund dedicated to investing in enterprises founded by entrepreneurs of color in the U.S. To learn more, please visit https://group.softbank/en.