Why We Invested - Mercado Labs
Updated: Jul 14
One of Ironspring’s core areas of industrial focus is how the evolution of supply chain platforms are going to reshape both global transportation and the way global supply chains operate and distribute goods. Closely aligned with that focus, I’m excited to announce we’ve partnered up with Mercado Labs to lead a new $2.5M round of funding to further accelerate Mercado’s leading Import Management System (IMS) Platform that is helping importers collaborate with suppliers throughout the procurement, ordering, and shipping & logistics processes critical to international trade.
Alongside full support from a global group of existing investors (including LiveOak Venture Partners, Schematic Ventures, Story Ventures, and Amplifier), pioneering supply chain investment firm Supply Chain Ventures joined us in this funding round. Additionally, I’m thrilled to be joining the board of directors alongside CEO Rob Garrison, LiveOak Venture Partners’ Mike Marcantonio, and former GT Nexus Founder John Urban, who sold that leading global ordering & execution company to Infor for $675M in 2015.
Global trade is over an $11T market that is still, unfortunately, managed primarily by Microsoft Office tools such as e-mail and spreadsheets. In the U.S. alone, the U.S. Census Bureau outlined there are over 225,000 importers that account for over $2T in global trade and are in need of modernizing their digital supply chain efforts. A typical international order takes 6 months from plan to receipt, and the underlying processes to fulfill that order can span 25 different entities, 9 siloed corporate departments, and 7 different business functions…all scattering a staggering amount of disparate data into numerous systems of records that are not orchestrated seamlessly together. Though there has been a lot of progress made toward end-to-end “supply chain visibility,” especially in the last 5 years alone, there is still a long way to go.
Enter Mercado to help its customers evolve their international supply chains into the 21st century by bringing products to market better, faster, and cheaper with more automation, heightened collaboration, workflow, and end-to-end visibility. The graphic below is a step-by-step representation of how Mercado digitizes the entire order process from a single source of truth connecting all parties involved:
From the moment an order is placed to when it hits is final destination, Mercado is moving global supply chains forward from spreadsheets and email to a single cloud-based source of truth where the entire lifecycle of that order can be generated, monitored, and recorded.
From native language translation and instant messaging to milestones and online ordering, the Mercado platform has over 70 unique and transformative procurement, purchasing, and shipping features every supply chain can benefit from to help lower operational costs, reduce risk, and gain greater efficiencies of collaboration across an enterprise. The 2020 global pandemic has only accelerated Mercado’s commercial activity as supply chain leaders have pulled forward efforts to invest now in hardening their supply chain capabilities to become more visible, resilient, sustainable, and flexible as challenges continue to arise. Supply Chain Ventures Managing General Partner Dave Anderson hit the nail on the head outlining why 2020 entered a global inflection point toward a solution like Mercado,
“With emerging trade compliance issues, increasing duties and tariffs, and growing supply chain complexities as sourcing shifts among countries, importers need a platform to manage their goods flow in these difficult times. Mercado is the choice of leading companies to avoid costly mistakes in paperwork and logistics.”
Further illustrating the push to innovate our global supply chains, see both recent Pitchbook data outlining ~$10.4B was raised by digital supply chain companies in 2019 alone and a 2020 McKinsey report “Startup Funding in Logistics” outlining almost $28B in venture capital has been invested into logistics since 2014 with an associated 76% CAGR during that same timeframe. This has presented a dizzying amount of “supply chain” and “visibility” solutions to learn about and navigate what is real and what is fluff. The landscape is now so crowded we are at a point where the ecosystem is being broken apart into “Last Mile” (i.e. crowdsourced delivery, dispatching s/w, etc.), “Middle Mile” (i.e. warehousing-on-demand, robotics and automation in FCs/DCs, etc.), and now a new category we’re excited for Mercado to pioneer — “First Mile.” In its simplest form, “First Mile” is one of the last remaining “supply chain visibility” whitespaces out there since it is focused on the furthest upstream ordering process that, in-turn, sets off a chain of events (and data asset!) that subsequently trickles down to effect both the “Middle Mile” and “Last Mile” shipping & logistics ecosystems. Mercado’s platform uniquely differentiates in market to provide that “First Mile” capability by combining a best-in-class procurement/purchasing/supplier workflow collaboration solution, deep international import/export shipping & logistics domain knowledge, and a modern B2B enterprise technology software platform that is scalable & accessible to everyone. The graphic below outlines how we feel Mercado clearly stands out among all the varying “supply chain visibility” vendors in market:
Mercado sits uniquely at the intersection of the workflow to process an order, the complications of coordinating international trade, and a modern B2B enterprise s/w platform made for all.
Above all to our Ironspring investment thesis is finding values-aligned founding teams with incredibly deep founder/market fit. Make no mistake, international trade is not for the faint of heart, and you cannot “hack” your way into understanding all of the complexities associated with moving goods across the world. Mercado CEO Rob Garrison and team are tailor-made for this endeavor, bringing over a combined 5 decades of international importing & supply chain experience. Rob’s very unique background spanning experiences as a shipper, 3PL, and forwarder, combined with executive experiences as a VP UPS, VP Fedex, and President of NFI’s Global Division, gives Mercado a seasoned leader who has an unfair advantage in his obsessive customer-first perspective about what it will take to solve these customers’ global trade pain points. I have zero doubt the Mercado team, and associated investor syndicate, understand the nuances of this massive customer pain point as well as anyone out there. An exciting time ahead for Mercado!
Mercado Labs Website: https://mercadolabs.com/