Lightspeed supports Markato, a marketplace that helps independent brands break into Asia

During the pandemic, almost every retailer in Asia has established an e-commerce presence and embraced digital payments. But one thing that hasn't changed is sourcing, say the founders of cross-border marketplace Markato. Retailers still have to travel to overseas trade shows, send cold emails to new brands, and fulfill orders by filling out forms and purchase orders. Markato wants to change that with a cross-border marketplace focused on indie brands that also allows them to manage their Asian wholesale operations in one place. The startup launches today in Hong Kong with $5 million in seed funding led by Lightspeed, marking the venture capital firm's first investment in Hong Kong.

Markato was founded this year by Brian Lo and Martin Li, who worked at Deliveroo and Uber respectively. The pair told TechCrunch in an email that they believe there is huge potential for the B2B wholesale business model in Asia, the world's largest retail market, and were inspired by the success of similar wholesale markets. They wanted to work with independent brands, as many lack the time, resources and knowledge to tap into the Asian retail market.

Lo and Li said independent brands typically need to build local teams or work with traditional wholesalers to overcome cultural and language differences when selling in new markets. Just as Uber and Deliveroo digitized the transportation and food industries, Markato is focused on digitizing the process of getting boutique brands to overseas retailers. A few examples of the brands she works with include ceramic brands Jore Copenhagen and Ini Ceramique, natural wellness line Nala Care, candle studios Ambustum and Stan Editions, and jewelry brand Gisel B.

Markato founders Brian Lo and Martin Li

For retailers, Markato offers personalized product recommendations, making it easier for them to discover new brands. It then allows them to buy at wholesale prices from European, American and Australian brands by aggregating the volumes. Markato offers an option to buy now, pay later for 60 days, and free returns for 90 days, making it less risky for retailers to have unsold inventory and making them more likely to try new products. In turn, brands benefit from analytics that help them make production and pricing decisions, while reducing their customer acquisition and operating costs.

Lo and Li said Markato is able to lower the price of cross-border e-commerce for SMB buyers and sellers by integrating with a payment infrastructure that saves on foreign exchange and other transaction costs related to payments. It is also able to secure lower cross-border tariff costs to market users to reduce shipments, which are further reduced by consolidated shipping volumes.

Markato now has 19 employees and has worked with 200 brands. About 80% of the brands it serves were previously not available in Asia, and 90% are sold exclusively through Markato. The platform currently has over 4,000 products listed and plans to grow to 2,000 buyers and 2,000 brands in the coming months. Some of the retailers it currently serves include Kapok, Co Ninety Select Shop, TLE Wellness Select Shop and JIA Group.

Markato plans to expand across the region soon, starting with Singapore. The funding will be used to hire its engineering, product development and business development teams, develop proprietary technology, work on its logistics infrastructure and expand its data analytics.

In a statement regarding funding, Lightspeed partner Rahul Ta...