Supply Chain Startup: Mercado Lab’s vision? Digitize Plan, Buy, Move

Rob Garrison, CEO and co-founder of Mercado Labs, a logistics platform startup focused on international shipments, came by the idea for his solution based on his own experience working for leading transportation organizations. “I learned firsthand that anyone who buys products internationally takes a lot of care to place a purchase order with someone overseas only to have everything denigrate to Microsoft Office,” Garrison recalls. “The shipper doesn’t have an electronic system, it’s another three months before the product is produced and ready to ship and then there are regulations and complexities association with global shipping. Microsoft isn’t a great tool for tracking that work flow.”

The concept behind Mercado Labs: Create a cloud-based platform that digitizes and tracks the work, from planning through purchasing and finally, production and delivery. Plan, Buy, Move. Founded in Austin, Texas in January 2018, Mercado Labs was originally funded by Garrison, who has since raised outside funds, including a November 2019 $3.2 million seed led by LiveOak Venture Partners with participation from Schematic Ventures, Story Ventures, and Amplifier Ventures. That was followed by a $2.5 million funding round led by Ironspring Ventures and
joined by Supply Chain Ventures that closed in July 2020.

Garrison, who recently turned 56, has been working in the supply chain management space for over 30 years. He notes that he’s not a 30-year-old tech guy, or a technologist by training. To build the technology, he brought in Lee Grover, an experienced Silicon Valley tech executive as chief technology officer and co-founder. “My experience in the industry is what allows me to navigate these waters and understand the space,” he notes.

He began his supply chain career working for an ocean carrier, and in that capacity, he got to see the world and work on international shipments with some of the country’s best-known companies. That was followed by stints in import and global shipping for several leading retailers, logistics and procurement for the company now known as APL Logistics, followed by stints at UPS, FedEx and NFI Industries. “I made a push to develop a platform like this at two of the companies I worked for, and both times what blocked the idea was that the technology wasn’t there,” Garrison says. He also noted that he’d been at the ground floor of companies like UPS Supply Chain Solutions and FedEx when it was launching its freight forwarding business as a new venture. “I had an entrepreneurial spirit,” he says.

He left NFI Industries in 2017 to launch Mercado. “I’d reached a point in life where I could afford to fund it to get started, and the risk wasn’t a high dive,” he says. “And there’s this amazing world of freelancers that let me do things affordably. It’s never been a better time to be an entrepreneur.”

The idea was to build a platform that in part did what a GT Nexus does for large organizations, with the financial wherewithal to implement, but democratize it. “We’re at a much lower price-point than enterprise systems and we can add a supplier in 30 minutes,” he says. “We’re in reach of the company that does just 500 shipments a year.”

The early team spent the first nine months building a prototype that they shared with select companies Garrison knew from his former jobs, beginning in the fall of 2018. Following several 90 day pilots, they took the solution to market in January 2019 and to the startup investment community that summer. Here’s what it does.

• Connect: First, Mercado’s platform provides a way to connect everyone involved in your shipments electronically; that’s everyone from your supplier to inspectors, freight forwarders, shipping companies and even government entities who can all look at the same documents.
• Plan: The first step in an international transaction is to price and vet a supplier in a disciplined way. All of the forms a buying company utilizes can be electronically exchanged. For now, Mercado is connecting one to one - a supply chain leader with relevant partners. In the future, the goal is to create a marketplace, where buying companies could connect with other suppliers on the platform that it is not currently doing business with.
• Buy: Once you select a supplier, they transition into buy when the purchase order is entered into the system. All of the workflow associated with purchasing, manufacturing and preparing an order for shipment is in the system.
• Move: That information is then handed off to a freight forwarder, and the shipment is tracked all the way to a distribution center, or wherever the final mile comes to an end.

“When I sum it up,” Garrison says, “if you look at the international supply chain market, it’s broken and that digs into a customer’s profits and sales. We can help companies get products into their supply chains and to market better, faster and cheaper. And you don’t have to rip and replace. We’re the alternative to Microsoft Office.” 

SCMR’s Supply Chain Startup Blog is published every Friday. If you’re a startup, a venture capitalist or a supply chain practitioner working with startups, and want to share your story, or have startup news to share, email me at [email protected]. Remember that the purpose is not to promote any one firm – and a blog shouldn’t be interpreted as an endorsement of a firm or its technology. Rather it’s to start the dialogue between me, my readers and the people creating the NextGen Technologies that will power tomorrow’s supply chains.

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