Shappi utilizes travelers to deliver consumer goods to Ecuador

Latin American e-commerce logistics platform Shappi announced Wednesday it has raised $2 million in seed funding, led by past investor Sixers Innovation Lab with participation from Concrete Rose Capital, Ganas Ventures, Sweater Ventures and past investor Brickyard Capital.

Since founding as Kargoo in 2018, Los Angeles-based Shappi has raised $3.2 million to digitize the process of getting goods from the United States into the hands of consumers in Latin America.

Studies have found that due to a troublesome import process along with lacking infrastructure, Latin American logistics cost twice in money and time than the 37 democratic, market-based economies within the Organization for Economic Cooperation and Development (OECD). Add in a latin-americas-missing-middles/”>higher value-added tax burden of 40%, compared to the OECD average of 32%, makes imported goods much more expensive.

These problems are what drove founder and CEO Karla Valdivieso to create Shappi, giving Latin Americans a digitized experience for the common trade work-around.

“I needed a new computer and I knew getting it, and other electronics locally, wasn’t an option,” Valdivieso told FreightWaves.

“There are only two Apple Stores, official stores, in the whole continent [of South America] , so the only option is to purchase from an informal reseller and pay two times the U.S. market price. The other common option we have is to request friends and family that happen to be traveling to the U.S. to bring us these goods back. … That is just the way it has always been done,” she said.

Valdivieso went on to describe a trip she took to the U.S., and after posting on Facebook that she would have extra space in her luggage for goods, managed to bring back over $1,000 in goods in one trip. 

“I was sitting on the plane and had an a-ha moment,” she said. “This process has never changed since I was a child and no one was creating a marketplace for this process. I thought at some point [Ecuador] would get caught up but we were still this third-world country that was not evolving with e-commerce trends, so that is why I started to build Shappi.”

Funding details Shappi
Funding amount $2 million
Funding round Seed round
Lead investor Sixers Innovation Lab
Secondary investors Concrete Rose Capital, Brickyard Capital, Ganas Ventures and Sweater Ventures
Business goals for the round Expand product teams and expand into new markets
Total funding  $3.2 million 

Shappi’s platform does just that — it connects travelers with those living in Latin America looking to buy goods from the U.S. at a reasonable cost. After travelers go through an extensive vetting process, they can choose what orders within the marketplace they would like to pick up during their travels to the U.S. or have delivered to their destination address. Once acquired, the travelers are tracked and can work with the purchasers to meet in a public location or deliver the goods directly to their homes.

The company currently has over 200,000 purchasers and travelers on the platform and is only operating in two locations in Ecuador. With its recent raise, the company is looking to expand in Latin America with the launch of Shappi 3.0, which will have it operating in 17 cities in Ecuador. By next year, Valdivieso hopes to add another country.

“The Latin American e-commerce market is a $52 billion industry and purchases between the United States and Latin America have huge demand. We have to be 10 steps ahead of the game to make sure we don’t fall behind that growth. Our investors are helping us navigate through that and they know who to manage growing teams to make sure we don’t fall behind of that growth,” said Valdivieso. 

Watch now: How Shappi is making LatAm shoppers happy

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