DEUNAa Silicon Valley-based one-click checkout startup officially joins Latin America nearly $100 billion e-commerce sector with $30 million in Series A funding after being largely under the radar since inception in late 2020.
Co-founders Roberto Enrique Kafati Santos and Jose Maria Serrano started the company after a career at McKinsey leading digital payments for Kafati Santos and in private equity at Carlyle for Serrano. They also recently recruited Jose Jorge Molina, who was previously Chief Marketing Officer for Bitso, to join the founding team to lead marketing.
“People were looking for help digitizing their businesses, and when we started researching this, we realized brands needed help selling online,” Kafati Santos told londonbusinessblog.com. “At the time, we didn’t understand the possibility of creating an ecommerce platform, but the decision was obvious and we’ve been making payments ever since. We helped several brands last year and have increased customer sales five times now.”
E-commerce is a popular market in Latin America, and the founders estimate that it will grow by 30% each year. However, they say the market is still plagued by three challenges: customer adoption, conversion and fraud.
That’s why they say they are building a “Commerce 3.0” that will tackle all three. DEUNA provides a payment infrastructure that integrates with major payment providers and alternative payment methods and provides merchants with access to more than 3 million users. Additionally, merchants can use the tools to handle payment orchestration, payment processing, fraud prevention, and lifecycle management based on actionable real-time user analytics.
In particular, to counteract adoption, DEUNA will offer multiple payment methods, which Kafati Santos believes will also help solve the conversion problem, with some 70% of customers leave their cart at checkout† The company has managed to increase its adoption rate by 40% and achieve about three times higher conversion rates, he said.
In Latin America, this is often due to the fact that about half of customers have not approved their payment method of choice. In addition, those whose payment has been approved, one in 20 payments are fraudulent, for example a payment with a stolen credit card, he added. That’s why DEUNA is building its own fraud technology with custom rules for merchants that reduce fraud and payment refusals.
With a fairly large ecommerce market, many one-click competitors have entered, mainly driven by the shift in consumer buying behavior that has taken place over the past two years. We recently saw Sleek raise $1.7 million to get started in a space dominated by companies like Ownit, Bolt, Checkout.com, OurPass and Rapyd, which have collectively invested more than $3 billion in the past 18 months. have collected. During that time, Colombia-based Addi said it was entering the one-click space after a $75 million extension for its Series B.
Kafati Santos said DEUNA has been able to set itself apart from many of the players by solving the entire acceptance-conversion fraud triangle, while others just go after it.
In the past two years, Kafati Santos and Serrano had largely started the business, with the exception of a $7 million seed round in October 2021. They have increased sales 120 times over the past year and have customers including KFC, Pappos and Dunkin’ Donuts.
This $30 million new investment was led by Activant Capital, with participation from Valor Capital, Abstract Ventures, Acrew Capital, Upload Ventures and a group of individual founders from companies such as Plaid, Kavak, Jeeves, Xepelin, iFood and R2. The company raised a total of $37 million.
The founders plan to use the new capital to expand their presence in Mexico, Colombia, Ecuador and Chile, add product development, go-to-market, employees to the team of 90 and new countries, such as Brazil, in access in the coming months.
David Yang, partner at Activant Capital, said his firm has invested in a number of fintech companies and believes DEUNA is doing something unique.
“It’s hard to raise a $30 million Series A in any market, but with their background, we had a high level of conviction in what they’re doing,” Yang said. “This is a great market opportunity, in some ways more attractive than the US DEUNA approach is also holistic rather than just part of the market. The team and vision they had when Jose (Molina) joined has had a strong execution so far. †