Why we invested in Mimo: Live Streaming in Latin America will be the next big thing
On why we invested in Mimo, the first live shopping platform in Latin America, taking a look into the future of Latin America tech, e-commerce, and live streaming.
The opinions expressed in this essay reflect our personal views only.
Source: Mimo
After Latin America has been for a long time a lagging region for technology startups, the region is getting steam. From 2016 to 2020 VC investment soared from just 0.5bn to 4.1bn USD. At the same time, more and more unicorns emerged, with 16 as of April 2021 including the fintech Nubank (valued $30bn), the car marketplace Kavak (valued 4bn USD), and delivery startup Rappi (valued 3.5 bn USD). At the same time, let us not forget Mercado Libre, the largest Latin American e-commerce platform, whose valuation quadrupled in the last few years to over 77bn USD.
Figure: Latin America Venture Capital Investments (source: Latin America Venture Capital Association)
Why we believe in a Latin American boom in the next decade
GDP: Even if the overall growth of Latin America has been at just 1% in recent years, the region’s economy is 2x that of India, and nearly as large as the economy of Japan. According to PwC, by 2050, two of Latin America’s economies will be among the top 10 largest economies in the world, with Brazil taking the 5th place and Mexico taking the 7th place, before economies such as Japan, Germany, and UK.
High internet penetration and usage: Internet and mobile penetration in Brazil and Mexico are higher than in other countries at around 70% each compared to 50 and 60% in India and China, while the internet adoption in Latin American countries is rapidly increasing. At the same time, the internet usage in some Latin American countries is among the highest in the world. In Brazil, for instance, users spend an average of 9 hours per day on the internet which points at a large opportunity to drive the shift to online with what many refer to as “Social X”.
Parallels to China: We also see a strong parallel with China, which with a vast population, medium-level GDP, and high smartphone penetration had similar conditions, and where technology companies have unlocked massive value by tackling inefficient value chains, and deficient consumer experiences. Just by bringing proven business models from China to Latin America, massive value will be able to be unlocked, similar to what we have seen with US technology companies, and Western-influenced startups penetrating Europe in the 2000s, and 2010s.
Why we believe it is the right time to start an e-commerce company in Latin America
E-commerce boom: As people are engaging online, e-commerce will present an area with large potential for growth. The current levels of e-commerce penetration in Latin America are among the lowest in the world, 8% compared to 30% in China, and 20% in the United States. According to the investment company Fidelity, over the next few decades the penetration in Latin America could reach over 50%, with annual growth rates of over 30%.
Space for new entrants: There is strong evidence that entrants with competitive offering have space to grow. For years people have thought that Mercado Libre would dominate the market. However, currently the company's growth is stalling, with only 10% user growth and 20% for GMV, and Shopee just overtook Mercado Libre as the most downloaded e-commerce app in the region. This is similar to China, where Alibaba had dominated thee-commerce for years, before Pinduoduo entered and was able to capture substantial market shares in recent years.
Why we believe in Mimo
Being inspired by the Chinese live streaming boom, Mimo is seeing the signs of the time, by launching the first shop streaming platform in Latin America in the midst of the pandemic:
As an all-in-one screen live streaming platform with a shopping cart, Mimo brings together shoppers, influencers/hosts, and companies seeking to sell products. The goal is to combine both the entertainment and education of watching a livestream, as well as the ability to shop products without being disrupted or led to other pages.
The two founders Monique and Etienne have decades long experience at technology and entertainment companies, and have assembled a group of top-notch early investors including Chinese shop streaming “gurus” Mark Yuan, and Zoey Zhang, as well as Latin American celebrities and star investors.
Whereas live streaming in Latin America is in its infancy, in China it quickly became a major channel for e-commerce, contributing to an estimated 171bn USD GMV in 2020, while conversion rates have been approaching 30%, which is around ten times as high than in traditional commerce.
Figure: China’s Live Streaming Commerce Market (Source: McKinsey)
How Mimo is creating more value compared to traditional platforms
Improved shopper experience: Similar to shoppers watching online shopping television, users can go on the Mimo page, and watch livestreams. However, the key difference is that shoppers can watch a larger set of channels, can ask questions, and shop conveniently without the need to take on a phone or visit another website. At the same time, Mimo ensures a level of quality, by providing trained influencers to companies. The adoption numbers are promising, with average conversion rates amounting to 10%.
Convenient onboarding for top companies: For companies the step to go to Livestreaming is a totally new experience, and it requires sophisticated onboarding and matchmaking with influencers that suit well to the respective brand. Mimo works closely with companies on making sure they understand live streaming and in finding the right people. The company has been successful in onboarding many top companies, including Dolce & Gabbana and The North Face, and Wodka company Grey Goose.
Ability for influencers to increase monetization: Especially in Latin America influencers are important for making purchasing decisions. For instance, in Brazil, 73% of internet users state that they have bought something because of a digital influencer’s recommendation. Influencers are able to monetize this ability partially by sponsored posts, but by engaging in live streaming, the monetization potential can be significantly larger, and there can be an instant interaction between users and influencers on products, which has not been seen before.
Source: Mimo
Mimo is uniquely positioned to build the most successful live streaming company
Great team: Mimo is a technology and entertainment company that needs to become the go to place for companies, shoppers, and influencers to do live streaming. The founding team of Mimo compromises some of the most experienced female entrepreneurs in Latin America. The CEO Monique has been a leading content producer, even winning a Lion in Cannes, while Etienne, has accumulated over a decade of experience working in tech and entrepreneurship, focusing on the building of products.
Brave firstmover: Whereas its true that first movers, don’t necessarily need to succeed in an industry, Mimo has rolled out its platform, and built a rich ecosystem of top companies, influencers, and shoppers in record speed, creating an ecosystem and knowledge, that is becoming more and more difficult to compete with for new entrants.
Clear offering: The major competition in livestreaming in the future might come from social media or ecommerce companies extending their offering to live streaming. Instead of doing everything, Mimo is seeking to become best in class, by bringing the top companies, influencers, and users together, ensuring a higher quality experience.
Forward Looking
Latin America will over this decade become one of the hottest regions to watch.
The Mimo Team embarked on a challenging mission, starting an industry from scratch, and seeking the right way to align Live Streaming with the taste of Latin American consumers.
We are confident that e-commerce live streaming provides unique value to consumers that goes above traditional influencer ads, teleshopping and other concepts we have seen in the past. The experience of China, just provides a glimpse of how large the industry and Mimo can potentially become.
About the author: Marco Brizzolara is a Strategy Manager based in China with experience in online media, and AI, and 4+ years in emerging markets. He is an angel investor in aspiring companies in e-commerce, entertainment, and FinTech.