Yummy Raises $4M to Become Venezuela's Super App

Yummy Secures $4 Million to Fuel Latin American Expansion

Yummy, a delivery application originating in Venezuela, is actively pursuing the development of a comprehensive super app for the nation. The company announced on Friday that it has successfully raised $4 million in funding. This capital injection is earmarked for the expansion of its dark store delivery services throughout Latin America.

Investment Details

The funding round saw participation from several prominent investors, including Y Combinator, Justin Mateen – a co-founder of Tinder – Canary, Hustle Fund, Necessary Ventures, and the co-founders of TaskUs. This total investment figure encompasses previously secured pre-seed funding obtained in 2020.

Justin Mateen commented on the investment, stating that while it may seem unconventional, Yummy has rapidly established itself as the leading super app in Venezuela. He further emphasized the team’s demonstrated ability to scale the business within a challenging environment.

Company Leadership and Background

Vicente Zavarce, the founder and CEO of Yummy, initiated the company in 2020. He is currently participating in the Y Combinator summer 2021 program. Originally from Venezuela, Zavarce pursued his education in the U.S. and subsequently gained experience in growth marketing roles at companies like Postmates, Wayfair, and Getaround before launching Yummy.

Due to travel restrictions over the past year, Zavarce operated as a remote CEO. However, he has expressed his commitment to maximizing this situation.

Business Model and Competitive Advantage

The Yummy application is available for free download. The company generates revenue through delivery fees or charges levied to merchants. Zavarce highlighted that Yummy’s fees are positioned as “the lowest in the market,” ensuring they do not negatively impact merchants’ ability to utilize the platform, differentiating it from some competitors.

Super App Strategy and Growth Metrics

Yummy is actively integrating additional features to realize its super app vision, with plans to introduce a ridesharing service later this year. Currently, the platform connects over 1,200 merchants with a substantial customer base of hundreds of thousands.

Over the last year, the company has successfully completed more than 600,000 deliveries encompassing food, groceries, alcohol, and other retail items. It has achieved a monthly gross merchandise volume of $1 million, alongside a 38% month-over-month revenue growth rate.

Economic Context in Venezuela

Zavarce explained that Venezuela’s adoption of the U.S. dollar over the past eight years, driven by political and economic difficulties, has been a significant factor. Transactions in dollars now account for as much as 70% of all commerce. This shift has shielded the business from the effects of hyperinflation and fostered an environment conducive to startup operations within Venezuela.

He believes that, coupled with increased innovation in consumer technology, Venezuela is poised to develop exceptional last-mile logistics capabilities. Yummy aims to capitalize on this opportunity by connecting various services within a super app, currently facing minimal competition.

Future Outlook and Expansion Plans

“We anticipate competition will emerge eventually,” Zavarce stated, “but our super app approach already fosters high user engagement.” He also noted that the company holds exclusive partnerships with 60% of the food delivery market, creating a strong competitive barrier.

The newly acquired funding will be allocated towards user acquisition – the company currently boasts nearly 200,000 registered users – and expansion into Peru and Chile by August. Simultaneously, Zavarce intends to increase user engagement within Venezuela. Further expansion into Ecuador and Bolivia is planned before the year’s end.