Arado
Building an efficient marketplace in Brazil to benefit small produce farmers, buyers, and end consumers.
Company: Arado provides an online marketplace platform designed to bring produce buyers closer to the field by connecting retailers directly with farmers.
HQ Location & Year Founded: Belo Horizonte, Brazil, 2021
Founder: Victor Bernardino, Co-founder and CEO, brings years of relevant experience as an operations, strategy, and logistics executive in Brazil with market leading companies such as Rappi and Natura. He previously worked at ArcelorMittal and holds master’s degrees in manufacturing and engineering management.
Funds Raised and VC Investors: $20 million from Acre Venture Partners, Globo Ventures, Maya Capital, SP Ventures, Spectra Investments, Syngenta Group Ventures, Urca Angels, Valor Capital Group, Verve Capital
Where did the idea for Arado originate?
Arado is really the culmination of my professional career and personal background coming together. My mother was a small restaurateur. As a single child, I was helping her by carrying potato bags or whatever needed to be done. In buying fresh food for use in small restaurants, we spent 30-40% of our time just doing procurement. Another big issue that our both restauranteurs and suppliers faced was that 40% of what was harvested ended up going to waste. As I grew older, I became interested in technology and worked for some leading companies with a focus on technology-based logistics and supply chain management. I was leading operations for Rappi working with their supermarket partners. I started talking with my father about the idea of creating a B2B marketplace to allow restaurant buyers to source directly from farmers. We had seen this concept start to work successfully in China.
What is the key problem that Arado intends to solve?
My father and grandfather had experience with growing produce and understood how difficult it was for small farmers to sell goods in the market and get a fair price. This was based on our thesis that there were too many middlemen between production and consumers, which led to waste in product and inflation of prices due to margins being baked in at multiple levels. We looked at the problem from different angles and started thinking more seriously. My father kicked things off. He was retired and wanted to start a business. We pitched and got into an equity-free accelerator program. I eventually quit Rappi and decided to join my father and focus on Arado full-time.
How are you most differentiated as a service?
We are creating the best channel for small farmers to sell produce. We want to be the market channel for the best pricing. We have created a two-sided marketplace in major Brazilian cities that brings together farmers and communities of producers, alongside retailers who can now avoid distributors or wholesalers. The value proposition works for both sides of the market.
What are the company’s key accomplishments to date?
We launched in 2021 and started generating revenue. I brought on several partners who could help scale both the technology and our revenue, which we grew by 30x in 2022. We opened many new cities in Brazil and grew to a place where we can go back to farmers and show the value proposition with a good portion of their harvesting. This led us to our Series A funding that closed in April 2023.
I am proud that we have built technology that works and reduces waste. Huge accomplishment. We are enhancing earnings of farmers by about 40% monthly. This is significant as there are 20 million people working in family farming, which represents more than 10% of the Brazilian population. Family farms produce most of the food that the country consumes. In addition, our pricing engine is now built, which helps buyers and sellers know if they are getting fair prices in the market. We are not just preventing waste, but we are reducing inequality from supply chain. It is more of a fair-trade situation.
What lies ahead in the plans for Arado?
We plan to grow by another 10x off the latest fundraise. We will start putting science into ESG and we are excited to bring on new investors that want to have an impact on business.
Ron’s Take
The challenge of fixing supply chain inefficiencies and cutting out middlemen has truly been a tale of two economies: those who have benefited from advancing technology and transparency and those who have been left out. In rapidly emerging economies such as Brazil, the pace of innovation is fundamentally changing the landscape. A marketplace such as Arado that helps all parties to optimize pricing and reduce waste provides manifold societal benefits: to the family farmer, the small restaurant owner, and of course, the environment and end consumers broadly. Solving gaps in food security is not solely the purview of governments and NGOs, as high growth enterprises like Arado that bring innovation to market will help to catalyze a new paradigm that benefits everyone.