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Don't worry, we speak : Español (Spanish), too!

Orchata: Why did this Mexican startup wait to announce it was in YC?

Don't worry, we speak : Español (Spanish), too!


Contxto – Y Combinator is always full of excitement. However, we were all delightfully surprised on Demo Day after being privately contacted by a Mexican startup, Orchata. Turns out, they too had been selected for this year’s Summer Batch. 

Thus, the final YC tally stood at:

The obvious question is, why did this Mexican startup wait to announce it was a Summer 2020 Batch YC finalist?

The answer: Why focus on press when you can spend your time priming your solution?

Indeed, Orchata is such a new platform that its Founders, Javier Gonzalez (CTO) and Luis Mario Garcia (CEO), opted to concentrate on growing and developing their brand new company—barely founded in January of this year.

We kept growing, making progress, it was so close to Demo Day that we decided not to focus on press.

Luis Mario Garcia, CEO and co-Founder at Orchata

However, wisely García reached out to Contxto in the aftermath of this particular D-Day to get the word out. Perhaps not a bad strategy; our interest was piqued as we dove into the digital world of this brand new yet fast-growing e-commerce solution.

A fresh, local dose of Orchata 

This Mexican startup was born Latin American and is already in eight different cities across the region. It services any local food supplier or grocery store so that they can sell and deliver directly to their customers’ homes through their own online store.

Indeed, many non-tech savvy SMEs (small and medium-sized enterprises) were forced to digitize in recent months. They needed a quick and easy solution to cater to their needs—both in terms of scale and cost.

This is how Orchata got a leg up on the more widespread super-apps that gobble up smaller businesses’ margins:

We are focused on SME vendors doing local food distribution—butchers, grocery stores, seafood, local shops—. There are millions of businesses that we are going to take online with the direct sales platform. Not Walmarts or Costcos; they are well served by Cornershop and Rappi.

Luis Mario Garcia, CEO and co-Founder at Orchata

The key for Orchata is that, unlike MercadoLibre or Rappi, the sales, the logistics, and the storage space is all in the grocer’s hands. Orchata is a pure tech solution providing specialized, localized e-commerce for grocers.

“Most of them have been doing it for 20 years and already have relationships with clients, brand, expertise, even infrastructure.

Luis Mario Garcia, CEO and co-Founder at Orchata

E-commerce: Going fully online

Being pure tech is good for the startup’s bottom line as well, since it means they’ve been able to spread across the region without that pesky geography getting in the way. And the Latin American market is ripe for this solution; there are 1.7 million small businesses to be tended to.

Meanwhile, on the grocers’ side, even before the pandemic, working offline still meant spending hours taking orders through phone calls, emails, and Whatsapp messages. Orchata helps them put all of that on autopilot ASAP. 

“A bit like WeChat in China, we are using WhatsApp to leverage a lot of our traffic,” said García. And thanks to this linkup and their software, businesses can:

● Receive orders in a mobile-first interfaceAccept payments

● Automate orders coming from messaging apps

● Launch promotions and referrals

● Optimize delivery routes

● Manage orders, revenue, and customer analytics in one place

But, interestingly, despite being unbound by geography, Orchata is going all in on the local. Indeed, beyond the logistical benefits of leaving everything in SMEs’ hands—since they are already neighbors with their customers—, Orchata also taps into our sense of collective responsibility. 

As Jeff Bezos’ becomes richer by the second, what do we do about our friendly local corner shop? 

Orchata stands for being local, for remembering our roots, that sweet day to day happiness one gets from having good local tacos. That is what local businesses represent for Latin Americans. They are the ones we are now giving superpowers to compete.

Luis Mario Garcia, CEO and co-Founder at Orchata

Sounds like community, and after months of lockdown, it’s something I could really use.

-AG

Alejandro González Ormerod
Historian, writer, and editor from Mexico City. He was a book publisher, academic, and cheesemonger before joining Contxto. Still deciding on which Latin American country to visit next; food and fun are the main criteria.

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