Oct 10, 2023

Our Investment in Wareclouds

Wareclouds is enabling last-mile logistics using peoples’ homes.

Neha Khera

Understanding last mile logistics in LatAm

How does your favorite snack get to your local grocery store? Or how did that package that you ordered online get to your home? If you live in the US, the process probably went something like this:

Pallets of inventory were shipped from the manufacturer to a regional warehouse on the outskirts of your town. Maybe a portion of that inventory was moved to a smaller distribution center nearby. From there, a last-mile delivery truck picked up the inventory intended for your local grocery store (or your home) and dropped it off as one of its many stops along its carefully planned route.

In many Latin American countries, this process is not always so simple. Busy traffic and narrow roads in sections of populous cities like Rio de Janeiro make it hard for large delivery trucks to efficiently navigate their routes from the outskirts of the city to the core. Complicating this further, a high percentage of CPG purchases are made by small convenience stores and bodegas, who only buy a few units at a time to stock their shelves as needed. The small average order value, combined with the arduous journey to reach each one, makes the economics of delivery hard to stomach for brands and 3PLs.

In many cases, it is also not possible to build closer distribution centers to service these downtown areas. Tearing down existing infrastructure to build them is prohibitively expensive.

So how is Wareclouds solving this problem?

Wareclouds provides a platform for brands to use people's homes as last-mile fulfillment centers. Each home is a “Warecloud” in the network, and the homeowner handles the fulfillment activities. Wareclouds has created a new type of gig worker, one who wants an additional source of income while being able to work from home. Most Wareclouds are actually hosted by women who, not surprisingly, are underrepresented in common gig work roles like food delivery or rideshare.

Each Warecloud receives deliveries from brands who want to store inventory closer to their customer. When an order comes in, the homeowner picks and packs the items and prepares them for pickup.

Wareclouds analyzes all scheduled deliveries across the network and creates optimized routes. Delivery routes are picked up by gig worker drivers on the platform and made via foot, bike or small car depending on the distance from the Warecloud to the end customer. The beauty of Warecloud's asset light model is that it can spin up and wind down locations (homes) depending on the needs of its customers. This gives Wareclouds better control and flexibility of fulfillment operations, improving the service level by over 99%.

Enter the Wareclouds team

We met Arturo and Nicolas, the founders of Wareclouds, during the CDL Supply Chain program in Montreal. We were immediately blown away by their passion, ingenuity and relentlessness. In fact, we had the luxury of tracking their progress over the duration of the program, and three months into it knew we wanted to partner with them.

Wareclouds currently works with over 240 brands across Chile and Brazil.

And this is just the tip of the iceberg. They are fulfilling over 24K orders a month, and working with brands like Ambev, Virgin Mobile and Unilever.

Arturo and Nicolas plan to expand the Wareclouds model throughout Latin America, and then globally. Their vision is to have 1M households operating as micro fulfillment centers, creating a new category of employment and giving households the opportunity to increase income and improve their quality of life by working with Wareclouds.

2048VC x Wareclouds

We are thrilled to announce our investment in Wareclouds, alongside our new friends at Chile Global Ventures. And a shoutout to CDL for allowing us to cross paths with such a unique and exciting opportunity.

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