2023-09-26 11:00:49
When he worked at Ambev, Rodrigo Colás went to visit a client and saw a simple solution — which ended up changing his life.
On a table, with no one monitoring, a small card machine stood next to chocolates of various types.
“The owner of the company explained to me that people picked up the products and paid immediately, and then a guy went there to supply the table,” Rodrigo told Brazil Journal. “I started thinking that if I might create something ‘cool’, with an attractive price and a greater product mix, I might easily replace the vending machines.”
A month later, Rodrigo quit his job at Ambev — where he had worked for seven years as a logistics manager — and founded SmartBreak, a network of autonomous minimarkets installed in residential buildings or within companies.
In condominiums, SmartBreak makes an agreement with the property managers to take advantage of a small space in the common area (usually an empty room) and create its own shop.
The startup does all the capex — purchasing the freezer, refrigerators, furniture and installing the payment system — but never pays rent for the space.
For the condominium, the solution generates a convenience that residents tend to enjoy, giving SmartBreak access to a valuable square meter.
Naturally, product prices are higher than those in a normal market, which guarantees a fat profit margin for the startup. Still, Rodrigo says they are smaller than those at a gas station convenience store, for example.
SmartBreak already has 650 stores in operation spread across Greater São Paulo. The objective is to reach 1,000 by the middle of next year, when the startup hopes to have an annualized turnover of R$200 million, and to 2,000 in two years.
To accelerate expansion, the startup closed a round at the beginning of the year led by Headline, Romero Rodrigues’ manager in partnership with XP, and which had the participation of corporate venture capital of the Ultra Group. Upon fundraising, SmartBreak placed R$36.5 million in cash.
The startup operates in a market that has become saturated since the pandemic. When Rodrigo started the business, in 2016, there were no companies investing in this niche. Today, “there are more than 300,” he said.
SmartBreak is the largest of them in its own stores. But there are some, like Market4u, that operate with the franchise model and have a larger scale. Market4u, for example, has more than 2,000 stores, of which only 200 are owned.
Romero, from Headline, said that the business model has high margins, but that there are challenges.
“The main thing is that your shelf is super limited, so you have to be very intelligent regarding mix, price and quantity,” he said. “The logistics also have to be very well done so the store is always stocked. You also tend to have more theft than a normal store.”
According to him, SmartBreak is investing more in data intelligence, but is only “scratching the surface”.
“This is one of the points that we think can add a lot of value. Knowing, for example, that when there is a Corinthians game, that building consumes more beer, so that day you have to supply the store with more of it,” said the manager.
The higher level of theft was already expected — given that there are no attendants in the stores.
Rodrigo said that the business plan already predicts a theft rate of 2% to 4% of store revenue. “But this is something we always need to be looking at very closely so as not to let it grow,” he said. “When someone steals and no one says anything, this tends to stimulate and can make the business unviable. So we have to have support from the property managers.”
All SmartBreak stores have cameras at the entrance to inhibit this type of attitude, and the startup has a team that remotely monitors stores that have a higher rate of theft.
Even so, the startup has already had to close 10 stores because the level of theft had exceeded 10% of revenue. “Before closing, we tried to reverse the situation, but if we start losing money for a long time, there is no other way out.”
Pedro Arbex
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