Portland pumps more into online grocery business
Published:Friday | September 3, 2021 | 12:09 AMSteven Jackson - Senior Business Reporter
Michael Lee-Chin’s Portland Private Equity firm and affiliates have poured more funds into Merqueo, the Latin American online grocery business that has been widening its scope since the pandemic-related lockdowns.
Portland views e-commerce as a growth industry amid the COVID-19 pandemic. It likes that Merqueo continues to expand from its base in Colombia to Mexico, and now Brazil.
Portland made the latest investment in Merqueo in July, having first invested in the business in 2019. The size of the latest injection is unknown, but the total investment done in three series equates to “over US$20 million,” Portland’s Managing Partner Robert Almeida told the Financial Gleaner.
Merqueo reportedly raised US$85 million in total under the three funding tranches, which puts Portland’s stake at about one-quarter. It is not known which entity holds the largest stake in the grocery operation, which was co-founded by CEO Miguel McAllister.
Merqueo sells over 10,000 grocery items with same-day delivery service. Its many warehouses spread across the Americas.
The grocery market in Latin America is worth US$700 billion, only one per cent of which is generated online, according to Merqueo, which wants to increase the penetration of online grocery shoppers and extend its geographic presence.
“PPE is pleased with the performance of the company in terms of growth of scope of business, expansion of geographic footprint into Mexico and Brazil, revenue growth and value appreciation,” Almeida said.
Back in February 2019, Portland invested the lion’s share of the total US$14 million raised by Merqueo in that first round of external funding.
The investors were attracted to the technology and the company’s quick run rate, which reportedly generated over US$1 million in revenue in its initial eight months of operations back in 2017.
Capital for expansion
In July this year, Merqueo raised US$50 million in the third funding round.
“Funds managed by Portland Private Equity did participate in this latest round, but the round was largely comprised of new investors,” said Almeida.
Merqueo, which employs 1,300, plans to use the fresh capital to expand into one of the largest online grocery chains in Latin America, growing its workforce along the way.
Portland Private Equity has invested in Merqueo through its Portland Caribbean Fund II. That fund has deployed US$158.5 million, overall, in various businesses that mostly operate the Latin America and Caribbean region, including: CVBI, US$30 million; IEH Penonome Holding, US$15 million; InterEnergy Holding, US$25 million; Clarien, US$10 million, Grupo IGA, US$17 million; Diverze Assets, US$15 million; Productive Business Solutions, US$15 million; InterLinc Group, US$7 million, Outsourcing Management Limited, which trades as itelbpo, US$4.5 million; and Merqueo, US$20 million.
Portland operated a previous fund called AIC Caribbean Fund, which invested US$225 million in mostly private entities across the Caribbean. Most of those investments were fully realised, except for a US$35-million investment in Las Olas, which Portland’s website lists as unrealised.