Fabián Gómez Gutiérrez is intimately familiar with Colombia’s food supply chain, from field to table. Rappi’s former expansion leader is also the son of a mango, lime, and papaya farmer. While collaborating with Rappi, he became aware of a pricing dynamic that caused him to pause. He was perplexed as to why restaurants on Rappi were paying $1 per kilogram for limes when he knew his father was only paid 30 cents for the same quantity. He recognized that, as a result of the supply chain’s multiple middlemen, both growers and restaurants — 87 percent of which are independently owned in the region — were being treated unfairly.
Gutiérrez reasoned that there must be a way to shorten the distance between restaurants and growers, resulting in lower prices for both parties, but it would not be as simple as simply moving the process online. The system in place at the time was largely based on offline transactions, with restaurants sourcing their products from a variety of local markets that included merchants selling from numerous small-scale farms. “At first, we attempted to create an app for farmers, but it was a complete failure,” Gutiérrez tells Forbes. He then realized he could communicate with them via WhatsApp, as many of them were already users. After integrating the growers, he was able to launch Frubana, a business-to-business marketplace that allows restaurants and retailers to purchase directly from growers and manufacturers. The startup is now seeking a $65 million Series B round following its continued growth throughout Covid-19.
Hans Tung of GGV Capital led the round, which included existing investors such as SoftBank, Tiger Global Management, and Monashees, as well as new investor Lightspeed Venture Partners. Tung has been an investor in the startup since its seed round in 2019 and says Gutiérrez’s market savvy initially reminded him of Anthony Tan, the founder of Southeast Asia’s superapp Grab. Tung adds that he believes the company has a long runway ahead of it. “Frubana is about ensuring that food and product distribution to restaurants is as efficient as possible,” Tung explains. “What’s interesting about this is that the products they supply to restaurants may expand beyond food in the future. It’s quite fascinating to see what Frubana can develop into.”
When Covid-19 struck last year, restaurants took a beating, and Frubana was coming off a 15x growth year. Rather than retrench, Gutiérrez says his company established a vision for where it wanted to be in 2030 and devised a strategy to get there. The startup did not lay off employees, as many restaurant technology startups have done, but rather tripled the size of its technology team to assist in bringing more restaurants on the platform and expanding Frubana’s inventory. When the company launched, 90 percent of its offerings were fruits and vegetables. However, the company expanded into other categories last year to become a more comprehensive grocery store. Frubana was able to double its restaurant count and triple its revenue. “Restaurants developed their own e-commerce and delivery platforms,” Gutiérrez explains. “When they returned, they had already become a digital user. It was easier for us to convince them.”
Additionally, the startup contributes to a more sustainable supply chain by employing a fleet of gig economy truck drivers who pick up orders in bulk, which reduces pollution caused by vendors driving their products separately to markets. The startup is currently operating in Mexico City, Bogotá, and So Paulo, with plans to expand rapidly within those countries. According to Gutiérrez, the company begins in each new market by researching the most popular produce, concentrating on those, and then gradually expanding to include others as they gain traction. Additionally, the startup hopes to offer working capital to its restaurant customers, similar to what Square has done with Square Capital for merchants. They are currently piloting the program with the hope of expanding it by the end of the year.
“Frubana has done the best and gone the furthest in the food supply chain category in Latin America,” Tung says. “When new players from Europe or Asia look at the region, they approach Frubana to see if there are opportunities to partner. We admire their efficacy and believe they have an incredible future ahead of them.”