The retailer plans to use the funds to expand into other Latin America countries, including Chile.
Mexican e-retailer Linio has raised 58 million euros ($US 78.95 million) from Northgate Capital and Access Industries.
The retailer, which launched in 2012 and now sells in Mexico, Colombia, Venezuela and Peru, will use the funds to expand into other countries in Latin America, beginning with Chile in June.
"This investment is another testament to our success,” says Andreas Mjelde, CEO of Linio. In addition to launching in other Latin American countries, Mjelde says the retailer will put the money towards technology and marketing in its existing markets.
Linio says it sells over 300,000 products across its sites. The retailer offers multiple payment options, including letting customers pay with cash or credit card on delivery or visit a facility to pick up a package and pay. It also offers free returns. The brand has more than two million fans on Facebook and more than 50,000 followers on Twitter. It has more than 15,000 employees across Latin America.
Offering such incentives as free returns and pay on delivery is important for retailers entering emerging e-commerce markets. The most common reason consumers with Internet access in metropolitan Mexico do not shop online is because they question whether products will actually be delivered, according to research from Forrester Research Inc. The second most common reason for not shopping online is consumers fearing that products will not arrive in good condition, Forrester says.
Additionally, many consumers in Latin America do not have bank accounts or credit cards. According to the World Bank, just over one-quarter of Mexicans over the age of 15 have a bank account. In 2011, the World Bank estimated the credit card penetration rate for Argentina among those ages 15 or older at 22% and put that figure at 13% for Mexico. To spur more online purchases in Mexico some retailers allow consumers to pay at convenience stores, a payment model that initially gained traction across the Pacific in Japan, Forrester says.
The two new investors join several others backing the mass merchant e-retailer. They include: Latin Idea, Tengelmann Group, JP Morgan Asset Management, Investment AB Kinnevik, Summit Partners and Rocket Internet.
Berlin-based Rocket Internet’s investment in Linio is just one of several e-retail holdings for the e-commerce incubator. Rocket has also invested in The Dafiti Group, which launched in January 2011 in Brazil as a shoe retailer. Dafiti has been feverishly raising money from Rocket and others and expanding throughout Latin America over the past three years to capitalize on the growth of e-commerce in Brazil and other emerging e-commerce markets nearby. Dafiti has raised more than $275 million and now sells online in Argentina, Brazil, Chile, Colombia and Mexico. It also now markets more than 125,000 apparel, accessories and footwear items from more than 2,000 brands. In Brazil alone it sells more than 100,000 products across 900 brands and has 1,500 employees.
Last year Rocket raised $500 million and said it planned to use the funds to support start-ups in Africa, Latin America and Russia.
Linio is No. 71 in the Internet Retailer Latin America 400. Dafiti is No. 31.