1Mby1M Virtual Accelerator Investor Forum: With Rodrigo Baer of Redpoint Ventures (Part 3)

Sramana Mitra: In the course of your introduction, you talked about two or three unicorns that have come out of your previous fund. Could you double-click down and talk about what they are, what problems have they solved, how they found traction, and why have they been successful?

Rodrigo Baer: The one I did in my previous fund is called I2, which is GrubHub for Latin America. I got to know the company because my brother was one of the founders. They were in an interesting position. They had a previous business, which never scaled.

Then, we put up the site. In two months, 25% of the orders were coming from the site. In Brazil, a restaurant has one computer. That’s the cashier. If you’re sending an order to the computer, the cashier is getting this, but he’s in the middle of making the calculation and receiving the money. You will never get a response to that.

They actually hacked a credit card POS and they changed the system. What they created was a machine that could receive orders inside the kitchen. You would send the restaurant an order. The machine would start beeping and print out the order. That changed the whole game. Now, I bypass the bottleneck.

The second thing that they did that was interesting was, they moved to mobile much sooner than their peers abroad. That gave them good leadership in the market. They have 95% of the food delivery market in Brazil. They basically own half of the deliveries in Latin America.

The second company is called GymPass. You pay for six months of gym and you normally go for three weeks. The gym takes hold of the remaining five months. He started selling passes for gyms, which was something that was not available in Brazil at that time.

Fairly quickly, one of his clients went to the HR department and said, “You’re paying for this gym. I want you to pay for this service because I want to do the gym close to my house.” All of a sudden, they landed a 7,000-client contact with one company. That company is now in 17 different countries and just raised a $300 million round from Softbank.

The third one is Rappi. You can basically order anything on an app. Here you can order anything. You can order food; you can order your groceries; or you can have somebody pick up jewelry for you. We did the seed. They just raised a billion-dollar round from Softbank. There are hundreds of delivery guys out on the streets wearing orange, which is their color.

Sramana Mitra: In the emerging markets, delivery services are taking a very important role because these are very congested cities and people don’t want to go out and do all the running around. And labor is cheap. 

Rodrigo Baer: The salary arbitrage plays a very big role in it. 

This segment is part 3 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Rodrigo Baer of Redpoint Ventures
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