Procuring items to fill the shelves of local stores is not easy in Latin America. Store owners sometimes have to drive to the wholesaler to get their orders because they are mostly done on paper or over the phone.
Gabriel Sendacz, Pedro Carvalho and Raymond Shayo believe that injecting technology into procurement will make the process much simpler for food preparation facilities in their home country of Brazil and across the region.
Latin American B2B is a large market, but it is fragmented when it comes to supply and demand. There are thousands of distributors with different products, but they have less than 1% of the market share.
Sysco, U.S. Foods and Gordon Food Service hold around 10% of the market share in the United States and offer a one-stop shop for everything from food to cleaning supplies.
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Gabriel Sendacz, Pedro Carvalho, and Raymond Shayo are co-founders of Cayena. The image is from Cayena.
Shayo explained that there could be a 40% to 50% difference in price for the same item across 20 vendors. It can take credit card companies around 30 days to pay restaurants, but at the same time, restaurants have to pay in advance for their inventory orders, which results in a working capital problem, especially when ingredients are the largest cost for restaurants.
It is easy for restaurants in Latin America to stay behind. The $100 billion wholesale food industry in Latin America is the target of a business-to-business marketplace that allows users to source inventory from multiple suppliers at one time and get orders delivered the next day. Buy now, pay later financing are some of the add-on services it is offering.
Users can get a quote on selected items by browsing through the products. The user's budget and the availability of suppliers are taken into account by Cayena's algorithm. Once the order is made, the company uses a drop-ship model to deliver the order.
After launching the marketplace in 2020, the company saw its customer base grow 10 times in one year and average ticket sizes grow four times, as it became harder for restaurants to procure inventories, with the average customer purchasing from Cayena five times a month.
After initially raising $550,000 in a round led by Canary, the company went after additional capital, including a $3.5 million round in late 2021.
After the seed round in September, the founders saw Cayena double in growth and keep that pace every two months or so as it reached a milestone of R$100 million, or nearly $200 million, in transaction volume across its presence in 50 cities.
The company received a $17.5 million Series A investment from a group of investors, led by Vine Venture, that included participation from a number of companies. Cayena has over $21 million in funding.
It is a hot market right now, which is a good thing, because it has become easier for investors to compare and benchmark which companies are successful.
Due to its business model, Cayena doesn't need to invest in warehouse, trucks or distribution just the technology, so much of the new capital will go into hiring. Shayo expects to double the team by the end of the year. New financial products and geographic suppliers will be created by the company.
Next up, the founders see opportunity in Latin America as a whole, so they want to be the largest food services supplier in Brazil, without having a single truck, in the next one to three years, then expand around the region.
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