Luis Mario Garcia was born in Mexico and made deliveries to the local grocery stores. After learning startup skills in San Francisco he decided to return to Mexico and start a software business.
Javier Gonzalez, Garcia's co-founder, was there when he met Garcia. The pair founded Orchata in 2020. Orchata is a mobile app that allows consumers to order groceries in just 15 minutes. It does not substitute for supermarket products and it delivers at supermarket prices. Garcia shared with TechCrunch that products delivered included fresh fruits, beverages, bread, and medicine, as well as household essentials.
Orchata achieves this by operating micro fulfillment centers in cities.
According to Statista, online food delivery in Latin America is expected to grow to $9.8 billion by 2024. This is due to the demand for fast delivery and the pandemic. Garcia sees three distinct waves in this market. The first is traditional supermarkets where you can spend hours. This led to the second wave, which includes big players such as Rappi in Colombia which raised $500 million in Series A funding at a valuation of $5.25billion in a round led T. Rowe Price and Cornershop in Chile which was purchased by Uber in 2019.
Garcia stated that many of these services take longer than an hour to deliver an item and may require phone calls if it isn't available. Garcia wants to be part a third wave software which integrates inventory and delivers super fast and with no substitutions.
Garcia stated that this is similar to the global trend, but there's a huge opportunity for convenience and to be the Gopuff of Latin America. Garcia added.
The Monterrey-based firm was part of Y Combinators summer 2020 program and announced a $4,000,000 seed round from a group including Y Combinator and JAM Fund, FJLabs, Venture Friends and Foundation Capital. Angel investors Ross Lipson and Mike Hennessey as well as Brian Requarth, Javier Mata and Javier Mata.
Jonathan Lewy is co-founder of Grin Scooters, and also founder of Investo. He is also an investor at Rappi. Garcia is building a product that will be useful to the end user. The key to this was the creation of infrastructure and inventory. Lewy believes Garcia is able to deliver quickly and that it's not about building a mobile app but the technology behind it.
Justin Mateen, general partnership at JAM Fund and co-founder and investor in Tinder, met Garcia about a year ago. He was also one of the first investors. Garcias and Gonzalez's original idea for grocery stores was not a solution, so they changed their minds and now do fulfillment and inventory.
Mateen stated that he fits the criteria of what I look at in a founder and that he is the kind of founder who never gives up. Luis finally allowed me to double my investment. It makes sense now. He is onto something. Now it will be about capital execution as he scales.
Mateen and Lewy both agree that similar apps will soon be available because of the large market for food delivery. However, Orchata has the distinct advantage of being able to control every aspect of customer service from beginning to end.
Orchata was launched just four months ago and already processes thousands of orders. It is also experiencing 100% monthly growth. Orchata will be able to expand in three more cities in Mexico with the new funding. Garcia also plans to expand in Colombia, Brazil and Peru for the future.
The company also targets multiple uses cases, such as someone who notices a forgotten item while cooking or consumers looking for food for the week.
Garcia stated that we will make food delivery super easy for customers and believe every possible use case for food delivery in the future will be like us. With the aim of becoming an app that you can access whenever you need it, we will eventually launch our own brands and food products.