Trela, a Brazillian startup that connects food producers to buyers through group purchasing, announced on Tuesday that it has raised $25 million in a Series A round led by SoftBank Latin America Fund.
The round also featured investors such as Kaszek, General Catalyst, Y Combinator, and the founder and CEO of Argentine fintech Ualá, Pierpaolo Barbieri.
Trela’s CEO and cofounder Guilherme Nazareth lived in San Francisco, where he was director of data science at Handle.com. When the U.S. dollar rose and the Brazilian real devalued at the beginning of the pandemic, he decided to return to Brazil to launch his first venture.
In his hometown of Porto Alegre, Nazareth talked to local producers to figure out how to optimize small retail businesses with the use of technology. Trela was launched in 2020 after he met his business partner, now the company’s CTO, Guilherme Alvarenga.
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“He had a WhatsApp group in his condo in Nova Lima, Minas Gerais, where neighbors could get together to buy cheaper food from producers,” Nazareth says.
And that was the idea behind Trela, to cut out the middlemen, like supermarkets, and deliver directly to the consumer at a lower price.
“The most interesting part was that this WhatsApp group was packed, it had a queue of 100 people waiting to join. That hooked me. It was an experience that the consumer was valuing, knocking on the door, asking to join.”
With the idea of creating an app that would work as this aggregator for neighbors in a building or condominium, the company was accelerated between January and March 2021 by Y Combinator and soon after received a $16 million Seed round from Kaszek and General Catalyst.
Nazareth says that the startup grows an average of 45% per month, but he does not disclose the number of customers.
The startup was born under the name Zapt, in Nova Lima, before undergoing a rebranding. “We bring people together through buying groups so they have bargaining power and a logistical optimization to cut out middlemen with producers, have wholesale pricing and free shipping,” explains the CEO. Trela charges a fee from the supplier.
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After Nova Lima, the startup began operating in the state capital, Belo Horizonte, which is still Trela’s largest market, even with operations in São Paulo and the metropolitan region. The supplier carries out the deliveries, although Trela is testing a model in which a logistics partner of the startup can deliver, with a higher fee to the supplier.
The startup’s target audience is condominiums and neighbors of high-rise buildings. The company has 33 employees and wants to reach 100 by the end of the year, growing revenue 80-fold by the end of 2022.
The new fundraising round will also be invested in improving the product, with an app for the supplier, and better delivery tools. Geographic expansion is another target. Trela plans to add three more Brazilian cities this year and invest in logistics.
The company wants to be like Pinduoduo, from China, through which customers have access to fish, frozen foods, vegetables, dried fruits, and selected products directly from the producers, but with the differential of delivery in condominiums. The company’s value proposition is related to the selection of products and the lowest price.
“Food e-commerce businesses are focusing all their capital on convenience. That is, delivering something in 10 minutes. The time to access a product is a valid problem to solve, but I think this market is too saturated,” Nazareth says. “We don’t have the ambition to have the fastest delivery. We are going to deliver to people with credibility the next day because we are connecting the two ends, the client has more quality at a lower price.” said the CEO.
Translated from the Portuguese by Adam Critchley