Carlos Andrade, Manzana Verde | Regional Scaling, and Raising from Angels vs Venture Capital [Ep. 39]

The audio and video are in Spanish. These notes are a translation.

The food delivery industry has become a true battlefield, in which giants such as Rappi, Didi, and Uber Eats, with billions of dollars in capital, offer extravagant promotions to their users and partners. Because of this, the sector has been characterized by startups that operate with very thin margins or even lose money on each of their sales. In this context, in a small city in northern Peru, Manzana Verde was born, a healthy food delivery platform that has not only grown rapidly in Peru and Mexico, but has done so with profitability margins well above the industry.

Today we talk with Manzana Verde’s CEO and cofounder, Carlos Andrade, about how to scale and expand regionally and how to raise capital from angel investors versus venture capital funds.

To date, Manzana Verde has raised almost 2 million dollars from venture capital funds such as Matterscale Ventures, FJ Labs, and Salkantay Ventures.

What You Can Learn Today

Accelerated expansion process and recommendations
Differences between fundraising from angel investors and from VC funds
Recommendations for crisis management in startups

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Youtube Timestamps*

Manzana Verde’s Scalability and International Expansion

[1:17] - How did Carlos arrive at the world of startups?
- Traditional food delivery business with part-time founders
- Entry into an incubation program
- Connections with other entrepreneurs
[4:00] - What is Manzana Verde?
- Healthy and affordable food delivery
- 6 thousand orders a day in 5 cities (Mexico and Peru)
- Partnerships with dark kitchens
- Cloud kitchen model
[5:52] - What opportunity did they identify for turning their traditional model into one that is scalable regionally?
- A gigantic market
- Knowledge of the problem
- Need for an alternative to current solutions
[7:36] - Why did they decide to enter Mexico?
- Prioritizing learning
- The move from Piura to Lima
- A sustainable model
[9:39] - What was that accelerated shift from Lima to Mexico in 8 months like?
- Different users and competitors
- Differences in recruiting talent
- Clarity about the risks that entering a new market implies
[12:35] - What would they have done differently in Manzana Verde’s expansion process?
- Looking for entrepreneurs with similar experiences
- New talent as a way to grow the company
[13:32] - Challenges of recruiting in a new market
- Doing it yourself versus finding talent to do it
- Evolution of the founders’ focus as the company grows

Fundraising from Angels vs Venture Capital

[16:13] - How was raising from local angels different from raising from sophisticated funds?
- Beginner angel investors
- Founders tracking the process
- Focus on growth and traction
- Venture capital funds with established processes
- Focus on team, differentiation, and future vision
- Manzana Verde as the largest wellness e-commerce in Latin America
[19:42] - Difficulties raising capital and how they handled them
- A team with no background in startups or in a specific industry
- Focus on the team’s qualities and the business vision
[21:41] - What was the initial strategy for raising capital?
- Talking with people who had already done it
- Preparing information and communicating effectively
- Clarity about what data you need when talking with investors
- Knowing you have to pay a price, and paying it
[25:20] - How did they handle the unit economics objection?
- Comparison with competitors
- Break-even in a city from 100 orders
- A business model in which everyone wins
[28:41] - How did you sell investors on Manzana Verde’s future vision?
- The problem of time and a sedentary lifestyle
- Cross-selling versus upselling
- Product Founder Fit
- E-commerce that improves the lives of sedentary people
- Recurrence, data, and the potential of both for the company

Crisis Management: The Manzana Verde Experience

[33:40] - How did the pandemic affect Manzana Verde, and how did they handle it?
- Lack of growth and of clarity as the real problems
- Benefits of the trends the pandemic brought
- Resilience of the team
[37:24] - Lessons from this crisis that shaped Carlos as an entrepreneur
- Defining expectations correctly
- Knowing the price you are going to pay for a given result
- Focus of the company’s efforts
- Process optimization
- Being objective when thinking about possible future crises

Tweet Round

[40:41] -
- Recommended book: The Hard Thing About Hard Things: Building a Business When There Are No Easy Answers, by Ben Horowitz
- Changes in Latin America’s startup ecosystem: democratization of networking opportunities between entrepreneurs and investors
- Founder to interview: Rodrigo Santibáñez of ControlHub