Mexico City-based GAIA has raised $ 15 million in a new round of funding by developing high-quality furniture for emerging middle and upper-middle-class consumers in Mexico.
The bridge round will lead the company to a much larger capital increase slated for 2021 as the company benefits from the growth of e-commerce in Mexico.
A 2019 JP Morgan report put Mexico's e-commerce market at around $ 22.6 billion, with online sales accounting for just 1.7% of the total retail market. JP Morgan expects the market to grow 12.6% annually.
As with everything else, the COVID-19 pandemic has accelerated the adoption of digital services as the country's population tries to practice safe social distancing and reduce the spread of the virus. For those consumers who can afford to shop online – even for high quality products like furniture – they are, according to GAIA Managing Director Philippe Cahuzac.
At GAIA, the new funds will be used to add new functionality to the company's online service, including consultations with interior designers, developing curated looks, and the ability for clients to create design sketches and visualizations for products at home. The company expects to use the new money to double its sales and marketing efforts.
The GAIA funding also helps expand the company's vision of supporting small and medium-sized Mexican furniture makers through financial products, training and revenue management tools, and educational offerings.
With its investment, IDB Invest joins the company's existing investors, including Rise Capital, Capital Invest, VARIV
Capital, French Partners, FJ Labs, and Warby Parker Co-founder David Gilboa .
The company founded by Raffaello Starace, Hassan Yassine and Cahuzac started out exclusively as an online retailer and has now expanded to 15 showrooms in Monterrey, Mexico City, Guadalajara, Puebla and Queretaro.
"We want to provide a brand-free and seamless urban experience to the modern Mexican consumer," Cahuzac said in a statement. "In five years we have built the leading digital player in the home category in Mexico."