When you live very far away from a grocery store, we’re talking like an hour and may include catching several buses or a rideshare, it can be difficult to make the weekly trip in. Enter Diferente, which touts itself as “the largest subscription foodtech for fresh organic produce in Brazil.”
Former James Delivery founder Eduardo Petrelli teamed up with Saulo Marti and Paulo Monçores to launch Diferente in early 2022 with a mission of making healthy foods accessible and to cut down on the 30% of the imperfect produce typically thrown away by grocery stores.
To do this, the company sources directly from organic farmers and is able to offer prices that are 40% lower than what you would find in the grocery store. Customers choose weekly or bi-monthly delivery slots and Diferente’s proprietary algorithm predicts the ideal basket of fruits, vegetables and leaves, with customers being able to customize the amounts.
The algorithm takes into account their preferences and the availability, seasonality and recurrence of the item and tailors future boxes accordingly. There is also some intelligence built in for the farmers to help plan their crops based on what’s popular with customers.
“Brazilians are extremely price sensitive when they buy groceries, so if you charge anything more than the normal price, they are going to buy in the offline module,” Petrelli told TechCrunch.
He noted that Diferente is able to gain traction with a low cost of customer acquisition because moe than 80% of Brazilian families cook at home versus the United States, where that is just less than 40%.
“Clients here like very fresh foods and need them on a weekly basis,” Petrelli added. “That’s part of why we think that we have the unique business model for Latin America.”
However, the company isn’t taking the instant delivery approach that competitors like JOKR are doing. Instead, it is focusing on Brazil’s density and recognizing that families are more spread outside of the big cities, which enables Diferente to go after other kinds of customers that will order larger carts on a weekly basis.
That approach seems to be working. Petrelli said Diferente, operating in 12 cities within the State of São Paulo, is already profitable per order. In addition, co-founder Saulo Marti said in the past 10 months, average order volume increased from 13.8% to 17.2%, and customers on average are ordering two boxes per month at a rate of $15 per box.
Not only do those figures point to good margins and good retention, but the ability for Diferente to expand in a more efficient way, Petrelli said. Since launching in 2022, the company has grown seven times in revenue and is starting off 2023 with a “positive contribution margin,” as Petrelli expects to end 2024 with more than $30 million in revenue. It has also “rescued” 300,000 kilograms of food already.
Last year, the company raised $4.4 million in seed funding and is adding $3 million more in a round led by Caravela Capital that also included Collaborative Fund and two new funds, South Ventures and Valor Siren Ventures. This gives Diferente $7.4 million in total funding since it was founded.
The new funding will help the company get its app launched, enter new categories and SKUs and get its second phase of artificial intelligence-powered customization underway this year. It will do some hiring to add 20% to 30% more employees this year to work with the current roster of 75 people.
Diferente also has plans to expand its delivery radius. Petrelli estimates there are 50 million potential customers within the company’s current operating area. Meanwhile, the company is offering an average of 50 stock keeping units (SKU) and has up to 170 SKUs available, depending on seasonality, Marti added.
“Sixty-two percent of our customers are middle class and they aren’t being targeted for buying online as much as the higher class, so that is a unique opportunity for us to go to cities where no one is going,” Petrelli said. “We already forecasted 36 cities that we can go around São Paulo, and we are now just planning how many we’re going to acquire.”