Vicente Zavarce, Yummy | Fundraising and Expanding From 'Small Markets', and the Super App Vision [Ep. 55]

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

Starting a startup in countries such as Mexico or Brazil is usually advantageous for attracting both customers and investor interest. Because of these market dynamics, it becomes hard to build a startup from smaller countries such as Bolivia or Venezuela, but Yummy is challenging that trend.

Today we spoke with Vicente Zavarce, CEO and cofounder of Yummy, the leading food delivery and e-commerce mobile app in Venezuela, which is scaling quickly toward Bolivia, Peru, Chile, Ecuador, and Panama.

Vicente told us why these markets are not as small as people think, and his recommendations on raising capital and international expansion for entrepreneurs in these countries. We also talked about B2C user acquisition and retention channels.

To date, Yummy has raised around US $30 million from venture capital funds such as Anthos Capital and JAM Fund, and recently acquired Yaigo, one of the leading delivery apps in Bolivia.

Thanks to Ariel Valverde of Yaigo, Diego Salas of Epakon Capital, and Claire Díaz Ortiz for the excellent question suggestions.

What You Can Learn Today

How to raise capital in “small markets”
User acquisition and retention strategies
Unit economics in the e-commerce sector

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Youtube Timestamps*

About Vicente and Yummy

[1:39] - How did Vicente get into the world of startups?
- He started his career in investment banking, working in M&A
- He worked at 3 U.S. startups
- He led the user acquisition area at Postmates
[4:00] - What is Yummy?
- It started as a food delivery app in Venezuela
- 3 business units: super app, ridesharing, and quick commerce
- Presence in Venezuela, Bolivia, Chile, Peru, Ecuador, and Panama

Starting a Company and Raising Capital from “Small Markets”

[6:43] - The opportunity to start a company in Venezuela
- Full dollarization of the economy
- 90% of Yummy’s sales are in dollars
- Yummy processed 3.5 million transactions in 2021
- In Venezuela there were no delivery or ridesharing platforms
- Businesses used to be done through social media
[11:08] - Change in investors’ perception of risk
- Initially there were success patterns in Mexico and Brazil
- Latin America’s megacities are now an attractive market
[14:44] - Focus on the local market vs. a large market
- Yummy was focused, initially, on growing in Venezuela
- Prioritize Product-Market Fit
- Build a sustainable business
[18:10] - Fundraising recommendations for founders in small markets
- Highlight the opportunity that exists in each country
- Sell the startup and sell the country

Yummy’s User Acquisition

[19:57] - Go to Market strategy and user acquisition channels
- Digital marketing and social media
- Referral programs
- Influencer marketing
- Teaser and launch campaigns
- A large number of drivers and couriers
[23:42] - Competition with large delivery startups
- PedidosYa as the main competitor in Venezuela
- Yummy has 80% of the market share in Venezuela
- Exclusivity contracts with large food chains
- Yummy Rocket’s initial positioning in Peru, Chile, Panama, and Ecuador
[27:00] - Recruiting and retaining yummers
- A massive population of motorcyclists in Bolivia and Venezuela
- Yummy has not had problems covering its fleet of couriers
[28:50] - Yummy’s unit economics
- Cost of acquiring new users
- User retention rate
- Lifetime Value
- Dark stores must be profitable by the third month at the latest

Super App and Quick Commerce

[32:53] - How and why did Yummy Rocket start?
- Low commissions at supermarkets
- Limited inventory connection with supermarkets
- Couriers assigned to a specific store
- Delivery in 15 minutes is a great value proposition for the user
- Own inventory and control of the value chain
[37:14] - Evolution of delivery in Latin America
- A dominant competitor by city and category
- Value offering according to the country’s trends
- Centralized go to market strategies
[42:05] - Why does it make sense for Yummy to be a super app?
- Purchase frequency of 4-6 times a month
- Yummy Prime users order more than 9 times a month
- Retention of dollars over time
- An iconic brand in some countries

Tweet Round

[44:24] -
- Recommended book: De Cero a Uno, by Peter Thiel
- Changes in the Latin American startup ecosystem: startups starting to bet on global expansion
- Founder to interview: Alessandra Angelini, of Influur

Episode Mentions

You can find Vicente on LinkedIn and Twitter

Recommended book: De Cero a Uno, by Peter Thiel

Founder to interview: Alessandra Angelini, of Influur

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