Ricardo Araujo on getting acquired by MercadoLibre, managing rapid growth, and logistics in Latin America.

NXTP
3 min readAug 14, 2023

NXTP Ventures’ Trip Gorman sat down with NXTP Portfolio Company Founder Ricardo Araujo for a discussion covering Latin American Logistics, Rapid Growth, Centralized vs Decentralized Logistics, and Being Acquired by Mercado Libre. Here are the insights you need to hear.

Understanding Logistics in Latin America

“Latin America isn’t like anywhere else. We have to adapt. Traditional methods don’t work here,” asserts Ricardo Araujo. The major hurdle? Infrastructural differences across the region. Varied road conditions and delivery accessibility require flexible and localized solutions, not a one-size-fits-all model. “We had to tailor our tech and operations to each area’s specifics. That was key to our success,” reveals Araujo. Additionally, differing regulatory landscapes across countries create a complex environment for cross-border e-commerce. Finally, varying levels of digital access and preferred payment methods, such as cash-on-delivery, influence how businesses structure their operations. Kangu’s success, for instance, emerged from blending the digital and physical worlds by creating local pick-up and drop-off points.

Managing Rapid Growth

At the beginning of 2020, Kangu had 30 employees, and right before their acquisition by MercadoLibre in August of 2021, they had 350. Kangu also went from delivering 150k packages a month to almost 8 million packages per month. Araujo guided his company through exponential growth without losing sight of improvement opportunities. “Rapid growth can be scary. But it can also be a chance to improve. When my company started growing, we didn’t panic. We looked for ways to do better,” he shared. Handling fast growth needs a careful mix of expanding operations, keeping quality, and growing company culture. It’s key to plan and predict future needs while staying flexible. By using scalable tech and infrastructure, processes become smoother and more efficient, matching high growth rates. Keeping customers happy and product quality high is vital for long-term success. A good company culture, open communication, and innovation are also needed.

Centralized vs Decentralized Logistics

Every logistics founder must decide if they are building a centralized or decentralized logistics platform. Ricardo notes that “both methods have their benefits. Centralized logistics gives you control. Decentralized logistics makes you flexible. It’s not about which one is better. It’s about which one is right for you.” Centralization makes operations smooth by bringing resources, decision-making, and control into one place. It helps with efficiency, cost-cutting, and standardizing processes, which makes it easier to manage and grow logistics services. On the other hand, decentralization spreads resources, decision-making, and control across several places. This approach increases flexibility, quick responses, and customization, letting logistics startups adapt fast to market changes and customer needs.

Post Pandemic E-Commerce

“The pandemic changed everything…It was crazy” reflects Araujo. The crisis forced physical stores to shutter, propelling logistics from a support role to the star of the e-commerce world. It wasn’t just about dealing with increased demand, but a complete shift in consumer behavior. Suddenly, homes became the marketplace, and logistics operations had to pivot fast. Adapting to this new normal meant refining logistics to meet elevated consumer expectations around delivery speed, tracking, and overall customer experience. The ability to scale swiftly, maintain agility, and remain customer-centric became the key differentiators in this altered landscape. As we move forward, it’s clear: those who cannot adapt may get left behind, while those who embrace change could ride the wave of unprecedented growth and innovation.

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