Praso, a company based in Brazil, specializing in offering a distribution platform tailored to small retailers, has successfully secured $9.3 million in Series A funding. In addition to this funding news, the company has revealed its acquisition of the intellectual property of Floki, an AI-driven company that streamlines the purchasing process for small bars and restaurants through automation. The specific details of the acquisition deal have not been disclosed.
In Latin America, retailers often find themselves managing relationships with numerous wholesale stores, sometimes numbering in the hundreds, in order to stock their shelves with necessary products. Despite the surge of e-commerce in the region, this process largely remains offline and manual. Customers frequently endure extended wait times in checkout lines, and even when ordering online, they are often required to personally collect their purchases.
In response to this challenge, startups like Nocnoc, Miferia, and Chiper emerged in recent years, aiming to introduce technological solutions. Joining this cohort, Praso was founded in 2021 by Samuel Carvalho, Fernando Bilfinger, and Rodrigo Castellari.
Focusing on the business-to-business (B2B) sector, Praso was established by CEO Carvalho following his experience working with small businesses while at Stone, a fintech company providing solutions to merchants. Carvalho emphasized the rapid digitization in consumer e-commerce over the past decade, while noting that the B2B sector remained largely untapped. Recognizing this as an immense opportunity, Praso was conceived.
The company facilitates connections between major foodservice manufacturers and smaller retailers such as bars, restaurants, cafes, and bakeries. Praso employs a data-driven approach encompassing demand forecasting, last-mile logistics, comprehension of purchasing patterns, and a credit solution.
Strategically headquartered in Recife, Carvalho’s hometown in northeastern Brazil, Praso benefits from minimal regional competition. Covering an area with a population of 50 million and 500,000 potential merchant customers, the company occupies a substantial market.
Carvalho noted that competitors predominantly target corner stores and other price-sensitive retail establishments. In contrast, bars, restaurants, cafes, and bakeries prioritize convenience and service, typically enjoying higher profit margins that reduce the necessity for price negotiations.
Praso’s existing model involves collaborating with 120 supply partners and serving 7,500 merchants. Initially, the company purchased from supply partners and resold to merchants, sharing customer data like purchasing behavior with suppliers.
However, Praso’s approach is evolving towards fulfillment services rather than inventory maintenance. As many manufacturers lack the logistical capacity to serve merchants, Praso is transitioning to handle the entire fulfillment operation for small customers, generating revenue from logistics and demand generation. The company also monetizes through customer acquisition via its marketplace.
In the past year, Praso’s revenue surged by a factor of seven, with projections indicating another threefold increase by year-end. In 2023, the company achieved contribution profit positivity, meaning it generates a profit from each order delivered.
The recent Series A funding round was co-led by Valor Capital Group and NFX, with participation from existing investor Base Partners, Formus Capital, Iporanga Ventures, and Endeavor Scale-Up. In total, Praso has raised $14.5 million.
Carvalho’s future plans include expanding the logistics network in Praso’s four metro operational areas, and integrating Floki’s data intelligence and purchasing insights into existing customer portfolios. Planned features encompass accounts payable management, inventory automation, and the introduction of a credit offering for merchants, allowing them to access attractive payment terms similar to a “buy now, pay later” model.
Carvalho envisions a substantial business opportunity by catering to the needs of these underserved foodservice and small business enterprises, aiming to provide them with a comprehensive suite of services.
