When Vicente Zavarce was first starting Yummy, Venezuela’s self-appointed “everything app”, he sought out other entrepreneurs in Latin America for advice. One of those was the leadership team at Yaigo, a Bolivian logistics startup, including its co-founder and CEO Ariel Valverde.
“They already had traction,” said Zavarce. “We were curious about how they were able to grow so fast.”
Now, not two years after that fateful meeting, Yummy announced that it would be acquiring Yaigo as it makes a play for expansion in South America, particularly after entering Chile and Peru. The irony does not escape Zavarce.
At first glance, the companies share a similar strategy. Both Yummy and Yaigo got their start in smaller Latin American markets where big regional players like Rappi — and international behemoths like Uber — were hesitant to invest resources.
Venezuela’s instability — initially a fundraising roadblock for Yummy — allowed the company to expand rapidly and test out multiple services in the absence of competition. From food delivery and dark kitchens in 2020, Yummy now also offers ridesharing, grocery delivery, and event e-tickets in its mission to become a bonafide super app.
“Venezuela’s e-commerce landscape was essentially nonexistent,” said Zavarce. “So, we have absolutely used that to build an ecosystem where now you can find absolutely everything on Yummy.”
But staying in a smaller market like Venezuela can be risky, said Sebastian Gutierrez, a Guatemala-based angel investor. “The longer a company stays only in a small market, the harder it becomes for it to raise funds.” This means that many founders in Latin America will try to enter large markets like Mexico, Colombia, or Brazil, places that signal to investors that they have the potential to scale.
By dominating the market at home, Yummy was able to assess which of these offerings was most likely to perform well in other, more competitive markets. Though Yummy started with services like food delivery, which were already very popular in Latin America, it was only when it saw the rapid adoption of its “dark supermarkets” in Venezuela that Zavarce thought it might have a chance of success abroad.
The team at Yummy decided “dark supermarkets” would be the way into Chile and Peru, delivering groceries quickly to people’s homes. For that, they needed to find a team with logistical expertise. That’s when Yaigo came to mind.
Like Yummy, Yaigo also came to be a major player in a small market. It did so by focusing on serving communities outside of major urban areas — the kinds of places that most delivery apps may not ever enter at all — making it the only delivery company working in all of Bolivia’s nine departments. One of its first moves towards expansion focused on Paraguay, another underserved market.
“Bolivia is a smaller market,” said Valverde, Yaigo’s CEO. “But that was to our advantage because we could validate our product in a market of 12 million people.”
In the same spirit that led Yummy to its “everything app” ethos, Yaigo’s deliveries went beyond just food — it worked with banks to deliver credit cards and bank statements to people’s homes, and partnered with large companies like Samsung and Herbalife to do delivery within Bolivia. Yaigo also allows small businesses that do not “have the financial, operational, and human resource capacity to implement their own e-commerce” solution to sell and coordinate orders over the platform.
But despite Yaigo’s ambitious plans to expand to El Salvador, Costa Rica, and even Spain, Yummy had access to something Yaigo did not: American capital.
Zavarce, though Venezuelan, is based in Silicon Valley. He built his career working for international brands like Postmates and Wayfair.
It’s the kind of experience that José Caparroso, co-editor at Forbes Latin America said, made Zavarce a strong candidate for the prestigious Y Combinator accelerator, and “that gave him a lot of knowledge and strategy that Yaigo doesn’t have.”
Zavarce acknowledges that being located in Silicon Valley and his experience in Western tech companies is Yummy’s “unfair advantage.” Over the summer, Yummy raised $4 million through Y Combinator and other investors, and another $18 million in Series A funding in October as it ramped up its expansion efforts. Yummy also received funding from the established Salvadoran super app Hugo (initially, Yummy announced it had been acquired by Hugo, though Zavarce told Rest of World that Hugo is now only an investor).
“Venezuela’s e-commerce landscape was essentially nonexistent.”
For a company like Yaigo, operating in a smaller market than even Venezuela, an acquisition like this is the best possible scenario, said Caparroso. “For Bolivian entrepreneurs, that’s good news.”
“I think it is a win-win,” said Valverde, who, along with Yaigo’s entire founding team, is staying on with what will now become Yaigo by Yummy. “We are giving the best we have in technology, resources and processes and we are receiving the same.”
But this next level of expansion, said Caparroso, will be Yummy’s true proving ground. “It will show whether or not they can be successful in a market where they do not have total dominance.”
Zavarce, however, sees the expansion as only the beginning. “The biggest opportunity we have is if we enter with a differentiated product and win, we already have the technology of the super app,” he said. “And one day, all the users in that country can wake up with a super app in their hands.”
