VTEX’s IPO: A letter from the founders
VTEX is now an NYSE-listed company. So, what does that mean?
Our IPO is one of the crucial milestones on a journey that started 20 years ago. We thrive in challenging scenarios; by way of commitment to our vision and principles. These commitments were key for us to reach this milestone — and will be fundamental moving forward.
Some may be familiar with VTEX and our history, and others may not. We have recently written a letter aiming to share an inside view of our journey and insights into the future that lies ahead of us. Here are some of the things you can find:
- How did we end up using software to deliver value?
- How were we able to execute our strategy with discipline?
- Why is it essential to develop a robust ecosystem for our customers and partners?
- What did scaling up in the LATAM digital commerce landscape teach us?
- How do we plan to transform the global digital commerce business?
VTEX is where commerce happens. Our platform is designed to be the Operating System for the commerce ecosystem. We enable enterprise brands and retailers to orchestrate their complex network of consumers, business partners, suppliers, and fulfillment providers. We are building the global digital commerce infrastructure that empowers enterprises to be relevant for the modern, convenience-driven consumer.
This journey started over twelve years ago when the largest retailer in the world chose us for a daring project: to implement their first online store in Brazil, one of the least penetrated, albeit fastest-growing ecommerce markets globally. We had a track record of successful ecommerce projects, and we offered them something few others could: speed to market. We promised to launch it within eight months, from kick-off to go-live. What we learned delivering on that promise shaped our vision for the industry — and the future of VTEX.
During those intense eight months, we realized that the challenges we encountered had nothing to do with generating revenue for our customer. Security, privacy, scalability, servers, deployment, testing — we tackled every issue except how to engage with and amaze the end consumer. This complex challenge inspired us: how could a large, blue-chip company keep up with the fast-paced digital world while dealing with so much overhead? It became evident that enterprises had to find a way to move online without wasting time and resources on unnecessary complexities. The industry needed a scalable solution. We knew that VTEX could transform technology from being a burden into serving as a powerful accelerator for enterprises’ revenue growth.
Two years after we successfully launched the Walmart project, we took steps towards executing this opportunity. This is VTEX today. Our platform provides the perfect combination of customization and speed-to-market for enterprises. By deploying our extensive out-of-the-box set of commerce capabilities, we enable even the most complex enterprises to move online and unlock the potential to start generating revenue quickly. They then learn what works from real-world scenarios and adapt, doubling down on their core competencies. Finally, they turn their limitations into potential by leveraging the knowledge of natively integrated solutions provided by an ecosystem of digital commerce experts. All of this is powered by a reliable, cloud-based platform designed to provide security, privacy and scalability.
The decisions we made a decade ago laid the foundation for us to get here. Choosing Software as a Service over ad-hoc, on-premise installations meant renouncing quick cash flow in favor of developing a homogeneous, multi-tenant platform that improves with every new customer’s demand, for all customers at once. When we chose to foster an ecosystem of partners for implementation instead of delivering full-service projects, we created expansive reach, crucial for supporting our fast growth. Choosing revenue sharing as a central part of our business model aligns our incentives with our customers and encourages us to focus on their success.
From day one, all we do is commerce. We attract, train and retain a high-performance team of digital commerce experts who help guide our customers to success while packaging industry knowledge into software. Our customers evolve their business by reconfiguring these composable building blocks of commerce capabilities, just like installing apps on your phone. Our partners take our solution even further by building new capabilities and distributing them to thousands of VTEX stores through our platform. Doing so, they scale faster and bring in more business, establishing a self-reinforcing cycle of success: as our customers grow, our ecosystem grows.
Our customers transacted just under US$8 billion of GMV through our platform last year alone. We are leaders in Latin America, the fastest-growing region for ecommerce in the world in 2020, a region six years behind other global economies in digital commerce penetration. We know what is coming, and we are prepared to capture that growth. We have learned how to scale in a complex region, comprising multiple countries, cultures, tax systems, and local payment and logistics providers.
Expanding from Brazil to Latin America and, more recently to the rest of the world, has prepared us to embrace challenges as intense opportunities to evolve as a team. Over the past 20 years, we have fostered a culture that values clear and precise communication: we strive to speak the truth and listen to one another with commitment, which requires great courage and vulnerability. The results are well worth it for everyone involved since we have developed a no-blame environment that enables fast-paced evolution, allowing us to realize our declared future, no matter the challenges we face.
The age of standalone software is gone — modern software is as valuable as the network it powers. In the future, we envision being at the center of a vast network that natively connects every part of the global digital commerce ecosystem. We see VTEX as the single control panel to manage all aspects of brands and retailers’ sales life-cycle, from engaging to selling and fulfilling. We are committed to creating a future-proof platform that makes collaboration scalable, allowing every organization to focus its talent on what makes it unique.
No matter what happens, one thing is certain: the future is about talent. We have taken it upon ourselves to create an abundance of diverse talent for our company and our ecosystem. We invest heavily in historically under-served yet high potential regions, co-creating centers of academic excellence to develop world-class, global-citizen digital workers. We foster the emerging market leaders who will build the next generation of disruptive technologies and global businesses. Education is our instrument for social impact.
We are here for the long run. We would like to invite future-driven investors to join us on this exciting journey as we build long-lasting foundations for the digital transformation of commerce. Our invitation goes beyond our organization’s (very much virtual) walls. It speaks to the size of the opportunity of digitalization in the emerging world: value creation is increasingly geographically distributed. We are witnessing a wave of emerging technology companies hungry for the opportunity to create prosperity in their respective regions. We know there is a transformative future ahead, and we are here to accelerate it.
— Geraldo Thomaz Jr. & Mariano Gomide de Faria, 2021