Glovo and Yellow.vc Co-Founder: Sacha Michaud

I was going to compete. I said, I don't want to compete against this guy. How were you convinced that, look, we're going to win in multiple categories from the beginning? Our first version of the app was a text button. But to grow organically shows you're onto something. 25-plus countries, $2.3 billion acquisition. And we didn't have any marketing money the first year. When was the first point that you realized that this is going to be a big business? In my opinion, passion and culture, skills can be learned. Literally within six months, we said, this is going to kill us. We continue fighting in Brazil. I think the toughest thing for Glovo has always been fundraising. Has always been convincing investors that we could compete against much larger funded companies. Top talent doesn't want to work with assholes.

We are in Barcelona, 10-11 years after you started Glovo. It's now 25-plus countries, I believe. $2.3 billion acquisition a few years back. Can you take us back to the first meeting with Oscar? And how did everything start for Glovo? Yeah, thanks. Thanks for the invitation. Yes, we're celebrating our 10th year. It's going to be 11 in January or 11 in March next year when we took our first order here in Barcelona. So yeah, I mean, in my case, I was in a different industry. I was in the gaming industry. I was with a huge UK company who's now huge. It's called Flutter Entertainment, the largest gaming gambling company in the world. And I saw what I really felt that what was happening with apps and what Uber were doing with ride hailing in the US specifically just then. And they were just revolutionizing a very traditional industry, which is ride hailing taxis through tech. I thought, this on-demand thing is going to be huge for consumers. And I thought, hey, wouldn't it be great to do an Uber, but instead of moving people around the city, moving things was a little bit. And I was thinking about that with a couple of investors and just sort of getting started. I was a couple of months into IDNation and saw a great company in the US called Postmates, which was a very good reference. I thought, wow, they were onto something. And Oscar was studying in the US in Georgia Tech. He's from Barcelona. And he came back and some friends said, a young kid, because he was 22, has come back from the US and he has a similar idea to you and you should meet him. And he was fundraising already and he was going very, very quickly. And I said, you know, Oscar, I really liked him, super smart. I am very, had a lot of drive, very listening, had a lot of qualities that I liked immediately. And I asked him, hey, I think you're doing something similar, I'll invest in this round as well. How much are you raising? And I'll cover the rest or whatever it is, but let's do it together. And in the end, he checked me out a little bit, didn't know anything about me. So he said, somebody said, he's OK.

How come you did that actually? Because given that you did other businesses in the past as well, right? So it's like, Oscar at the time was very young. How come you actually made this decision?

Yeah. And by the way, it sounded a bit competitive at the beginning. So how come you didn't start your own and you joined? I met him and I thought, I'll be perfectly honest. I mean, if I was going to compete, I said, I don't want to compete against this guy. Actually, I went back and said to one guy who was the original idea, actually, was talking and was a big investor. I said, I met this guy, just come back from Spain. He said, well, why are we doing with him? Why don't we just raise money and kill him? And I said, no, no, he's very smart. It was a good decision. And yeah, and we pretty much, I think January 2015, we closed the pre-seed round, 140K, imagine. From Barcelona? Yeah. Generally, Barcelona business angels. I put in some myself and we launched in March 2015, the first order. So we went very quickly. And yeah, and I think Oscar in the US as well was seeing, you know, Uber and, you know, he's seeing what was going on in the US market, which was a good couple of years ahead of Europe as usual. And I think he saw that tendency and he came back and he said, look, why don't we do something like that? And then, you know, as you get into the space, you realize there's other people, companies doing similar stuff in Europe and then realized Deliveroo were really growing in the UK.

So Deliveroo was alive at the time?

Yeah. But for me, they weren't an initial reference because remember, I wasn't thinking so much about restaurant food. We weren't. We're thinking about a lot of other things. And in fact, our first version of the app was a text button. Well, there's two text buttons. It's go and get something for me. So go and buy it for me. Or go and deliver something or pick up something. So basically a courier service. So keys, you know, imagine, oh, I've left my keys in the office. Go and pick them up and bring them here. Or go to a restaurant, go to McDonald's and pick me up two Big Macs. So we had two text buttons. Not very scalable. No business model behind it. We'd lose money on every order, of course. But it was quite viral because people suddenly had the whole city in their hand, right? It had no limitations. So it's quite... And people began talking about it a lot. There's this app and it actually works.

What are the first orders that are placed, given that you can't order anything?

We had a lot of restaurant food, actually. Yeah, that's what really...

So was it evident that, like, because of the frequency of food, it's very important?

I mean, it's something that we assumed there would be a lot of restaurant food. But what was happening, they were from top-end restaurants. So basically, restaurants who hadn't... are not in the delivery space, not really interested, you know, a deluxe hamburger place or a really top-end sushi places. Consumers would order from there. The courier would go there, pay with a debit card. Wait. Not very scalable at all. They'd prepare it and he'd pick it up as if he was a normal customer doing a takeaway. And then we started having... So, of course, consumers in Barcelona, then Madrid, and we launched it then in Valencia, and then we jumped to Italy. Suddenly, they had the best restaurants in the city available without a menu. You know, operations weren't great. Obviously, there's a lot of missing products. I wanted this. The courier would call the customer, sorry, they don't have it. But it got us started. And it was like an MVP. We didn't think it was an MVP, really. We thought it was like the first version. But actually, we used that model for nearly 18 months. And it was growing, but we're going super quickly, obviously, because it's not a lot of pain points. You know, the product's not there or they're missing something.

From the driver's side? How did you convince the drivers, the glovers, to actually do this task? Because it's a three-part...

Well, the couriers were paid per order, and they were paid quite well per order.

I see. So was it an easy part to actually get them?

Yeah, yeah, it was easy because it was a flexible model then as well. So many couriers weren't full-time. They'd be doing other things. They'd be combining with going to the university. So there's a lot of combinations in general. And obviously, in the beginning of launching a city, which is one of the tricks we had, we often wouldn't have enough orders to give them enough income, right? Which is one of the big chicken-and-egg things that our industry has. So in the beginning, you'd pay them fixed fees and so guarantee them a certain amount of income per hour, even if they didn't have orders.

I see.

And then that would give them a decent income per hour, which is interesting for them. And then we'd work around that. And then going back to your question in the beginning, yeah, I mean, the first orders were not. They were everything. You know, people would go to pharmacies, tobacco. We don't do tobacco in Spain anymore for regulatory reasons. But in the beginning, you know, people would order, you know, a pack of Marlboro Lights, which would cost five euros and pay six to get them delivered. And, you know, electronics, chargers, groceries, of course, last-minute groceries. And then, obviously, the category that really took off was restaurant foods and specifically in restaurants that either had a very good brand, the top, you know, McDonald's, you know, the top brands like that, but also high-quality restaurants that normally would be dine-in and maybe have a takeaway service, but really high level.

At what point do the restaurants get pissed off that this is happening?

In the beginning, they don't because it's incremental revenue. And there was, in the beginning of Glovo, there was no commission. I didn't have a, we didn't have an agreement with the restaurant. So there's no contract. But I remember our first really top brand was a very top-end sushi restaurant at the high end of Barcelona. And it became very popular. And in the end, they got so annoyed because it wasn't just one courier there. They'd have, you know, 10 couriers outside every night. And so they called us and they said, you know, what's going on here? And I said, no. Luckily, the, you know, the head maître of the restaurant who was running the restaurant said, no, no, I'm actually a user of Glovo. I use it for McDonald's. And he said, look, I said, why don't we put some tech in? Why don't we put in an app so you can prepare the order? Couriers are waiting less time outside. He said, yeah, but I'm not gonna pay your commission. I said, no, no, no need for commission right now. And the great thing about that is we signed with zero commission. The sales team the next years were really annoyed with me because they had to try and get commission off these guys. And they're used to being zero. But it was great to have their brand in the app. Because what happened with that is all the other restaurants that these guys are there in Glovo, it's not so bad. I want to be there. This is a top sushi brand. Maybe I'm missing out on something. So it serves as an attraction to the brands that were sort of against delivery in those days to join us. So it was a great move to get their brand in there.

So it's like, is the key from the restaurant side, the actual brand of like having like three big brands and basically then it brings all the other restaurants. That's how it works.

I think it depends on the city. We're in a totally different place today than we were 10 years ago and evolution of the market. So today delivery and digital, and by the way, digital now is not just delivery. It can be pickup. It can be a lot of things. It's key to every single, you know, pretty much every single restaurant. In those days, it wasn't, of course. And it was perceived as slightly negative. You know, you had, you know, I remember one, I went to see one restaurant to try and get him in the app. And he said, no, no, I don't want to be, I don't see my brand next to a bunch of kebabs, nothing with kebabs, I don't mind. But his perception of being that, I said, no, no, this is a new type of delivery. This isn't because the old companies like, well, Just Eat, which is gen one, we call them, would have that type of interface where they would just have a marketplace, send the orders to the restaurant. The restaurant would do the delivery, sometimes with a courier, but sometimes with a waiter would actually get on a motorbike and deliver it. So that concept scared a lot of people who really focus on high quality brand, high quality food. And we were trying to change that. That actually, you know, it works amazing UX for users are cool and users love us. They're talking about us. You have complete visibility of the order from the moment you order to when it's delivered. You can see the courier going through the city. So there was a bit of a first year of really convincing brands. Then things started to get traction and started to become normalized.

Was the first, like, was at that point that you realized that this is going to be a big business? Then roughly at the year mark, or was it earlier?

I felt super early. I mean, I'd built companies before. Yeah. And with a, you know, got to millions of users. I'd never received so many congratulations from my friends in the first few months of Glovo saying, hey, what a great idea. And you know what? It works. And I said, yeah, of course it works. But there was a lack of belief when you talk about the service. And I said, this is quite cool. When you have organic growth and we didn't have any marketing money in the first year, pretty much a year and a half until we built the marketplace, which is what is the base of Glovo today, which is what everyone sees with the brands, with the categories and with the menus and the prices. We didn't really do any marketing. But to grow organically shows you're onto something. I think that's a great sign of a business. It's just people telling each other. People telling each other, we did quite a lot of press. The press loved us in the beginning. They thought, what a great idea.

Press? What kind of press?

Just anything, anyone who wrote about tech, anything wrote about product, anything wrote about retail. At the end of the day, it's, you know, part of the streets. But, you know, tier one media and, you know, newspapers and things would get an article in there, talk to them about the business. Journalists would love it because it's useful for them. You know, it's something that was, it was a storytelling. So we used a bit of press. That worked quite well. But there was a sense, I had a sense that the organicness of the growth, the virality, even though it was small numbers in those days, was like, we're onto something here.

So it's basically the rate of growth and the organic rate of growth. Okay. Very interesting. And then from the, what's the point that it changes from text and then you start having categories in the app?

Yeah. So pretty much a year and a half into the business, maybe a little bit less. We, you know, we built Global 2.0. Which was actually the, what is the marketplace today, which you have visibility, the categories. And that was the moment when you really start fixing a lot of the pain points in the operation. You start now getting commissions of our partners. So for every sale, you know, we work hand in hand to win together.

On that, like, how do you convince someone that doesn't pay you to come and pay you?

Well, we're giving them incremental revenue. It's starting to get big. You're either in there, you're either with us or your competitors is going to be with us. So you can, you know, you can have this, in those days, 5% incremental orders or our consumers are going to, you know, use one of your competitors. And restaurant food has generally, has a high, quite high margin. So they could factor in the commission. They didn't have to have a new restaurant to work with us. They'd use the standard restaurant, the same staff. So I think it was just a way, and it's a small percentage of the business at the beginning. Obviously we were growing. Today, it's obviously the digital side of most restaurants business is a significant part of the business. But in those days, it was a question of, you're there or one of your competitors is going to be there, was probably the main thing. I think those that were reticent about joining us.

It's very interesting. So the app changes in that format. And then what changes from the operation side? Like how do you get more glovers to be doing these tasks? And was this, are we speaking now that you are still in Spain or did you expand?

Then we were in Spain, Italy.

Spain, Italy. Why Italy?

Italy, we had an opportunity. It was opportunistic. There was a local company similar to Global, a great GM, Deliveroo. And I believe Uber Eats just moved into the market. We're going to invest heavily. And they were having trouble fundraising. You know, the investors thought they're not gonna be able to compete with these giants. And there was an opportunity to acquire that business. It was very small, but it was more the talent and it was more the GM. And we'd suddenly launch Italy with a good team. And it was, you know, it was a great decision. You know, Matteo did a great job the first few years of really building us really into competitive player. With, you know, the story of Global has always been David and Goliath. We've always been a smaller player versus hugely well-funded companies competing against us with a lot more money. So we actually be a lot more agile and have better teams and local execution. But yeah, we had an opportunity. Got trust that this company was, you know, was having trouble fundraising and might be willing to do an exit. And we flew over and did a deal very quickly.

Yeah. But like, isn't this like, didn't you have exactly the same questions from investors? Is it like Uber is coming here and so on? Like, how were you convinced about it?

That was the toughest. I mean, we had many tough things, obviously. But I think one of the, I think the toughest thing for Global has always been fundraising. Has always been convincing investors that we could compete against much larger funded companies with a lot of capital. You know, we pretty much had to find a lead investor every single round because our lead investors were not that deep pocketed. Whereas, you know, you had our competitor LATAM Rappi. I mean, we did a huge round for us was then. And then we read the next day that Rappi's done triple investment by SoftBank. SoftBank, you know, had unlimited funds. I mean, SoftBank, you just know if they execute right, they're just going to have unlimited amount of capital. So there was, fundraising was super, super tough. Convincing investors that we could actually compete.

I mean, seeing it from the other lens, given that you make investments these days, like, do you think that they were right? Or what would the investors were missing?

No, I think, I don't know if they were right or wrong. At the end, you know, we were a bit of a success story, but I think there was three things happening. Certainly the later stages, which is when you really need big funds, because we're closing, you know, 100 million plus rounds. I think there's three factors. The funds that were really interested in our space, on demand, the really important ones are probably already invested in one of our partners and one of our competitors, sorry. So they, then there were many funds who weren't interested in our sector. They got, you know, burnt by some other on demand category, like ride hailing as well. Many of the ride hailing apps failed. I mean, so I think that, or really, and then there was a third segment, which was, you know, they thought a small Spanish company, you know, can compete with these huge, and in those days there was, there was Deliver in the UK, you know, killing it. Uber Eats doing world domination across into Europe. Delivery Hero was one of the leading European, Berlin, now we're part of the family. And of course you had Just Eat, which although is an incumbent and has a different model per se, you know, they just send the order to the restaurant, and the restaurant goes and delivers, which hence gave us the opportunity to go in, because generally the UX was terrible. 20% of orders would be lost.

Oh, was this a case?

Yeah, so we call it Gen 1 in our business. So Gen 1 was, you'd order either through a web or an app. The order would go to the restaurant, but the app or the website would forget about it. I mean, no visibility to the courier. The restaurant would then be in charge of getting that food to the customer. So of course many restaurants didn't have couriers available, didn't have, you know, waiters available or, and they would just like, just not do the order. So terrible UX. So, you know, 20% or 25% of the time you're calling the restaurant, where's my order? So that allowed Gen 2, which is companies like ourselves, to control the whole flow. So an order would come in through my app, my consumer, we'd let the restaurant know. Meanwhile, we'd let a courier know, the restaurant would begin preparing the food, and then the courier would pick it up and then deliver, and always giving visibility 100% of the time to the user, right? And if there was an issue with prep or the restaurant couldn't do it, then we'd let the customer know. So you'd have a less bad experience instead of waiting, waiting, waiting for an hour and then calling the restaurant. So that allowed us to do that. So I think there was, there's a little bit of that, that, you know, and then there's the fourth group, which were the crazy ones who actually trusted us and led our rounds. And then we had a lot of investors as well that weren't leading, but were, will continue to invest that back them up. So our current investors would often continue investing. And also we're very lucky, to be honest, the fairly early on delivery hero, which was a sort of competitor because they had different brands in different parts of the world, invested in us and allowed us to work independently. And they always continued investing in every round. So they would back up the lead investor, which was fundamental, that support we got.

That's something I want to ask you. In a bit. Now, the one thing I wanted to bring up is that you have all of these, you have always the idea from TL, Peter TL, about get one market, monopolize one market before you go to the next one. In your case, it seems that you did a number of things at the beginning. You allowed a lot of people to be ordering many different things. Did you know about this idea? Or was this a wrong idea? Or how were you convinced that, look, we're going to win in multiple categories from the beginning?

It's a tough one, really. And I don't know what was the... We did our decision. Looking back, if we only focused and doubled down on restaurant food, would we have done it better? I don't know. One thing Oscar certainly had was our vision of everything and anything. And that's how, you know, that's how we build gold from day one. And we definitely wanted, we call it multi-category. So we wanted to give our consumers that they could pretty much get anything from their city. And obviously restaurant food is the main category by far. Groceries was the second, and et cetera, et cetera. And I think it came down to, although the percentage of orders of everything that wasn't restaurant food was very, very small in the beginning, actually. It's growing faster now than the restaurant. But it was a wow moment, right? So let's say, you know, I'd order four times a month on Glovo and three times as restaurant or four times a restaurant, but every now and then I'd order, you know, nappies. Because I've run out of nappies for my baby at 11 o'clock at night. That's a wow moment. And they, you know, it really tightens us with the consumer. Or last minute I'm cooking and I can't leave the house and, you know, I'm missing some ingredients and I'll go and pick it up. Or my charger, you know, left my keys. Or my kids have come home from school and they don't have any keys and I'm in the office. Those type of wow moments were quite important, I think, for people to talk about us. Because, you know, getting a hot pizza, you know, even in 2017, it's not cool. I mean, it's not something you go, it's not something you're gonna go and talk the next day about. But saving somebody's, you know, moment there is a moment that they'll go and talk about it. And I think it helped consolidate us in anything brand, which was super cool. And I think we were perceived as much cooler with consumers than the pure restaurant players. We're just all about restaurant food and just delivering hot food. I think it was an important part. And then what happened, and it was still a very small part of our business, but we maintained. And many of our investors, of course, suggested to us, no, why don't you drop all that? It's insignificant and double down on restaurant food. And we kept firm. I think we made the right decision. And then COVID came along and changed the game for everyone, right? That's when people, then from all the supermarkets, you couldn't go. Suddenly supermarkets were on the apps. Then you had Uber Eats, Deliveroo, scraping to get groceries in. They had no experience with groceries in those days. They had that pain curve that we'd been doing for a number of years. So suddenly it spring rocketed all the other stuff we were doing, right? And educated the market to a certain extent. And all those consumers who've ordered groceries on demand, like immediate grocery deliveries in COVID are still ordering today.

On that, what's the secret that they didn't know and you knew about the groceries?

Well, groceries is a different business, right? A, I mean, one thing about restaurants is they have a very small menu, no, very controlled menu. They normally have 100% of the dishes available. Very rarely they run out of dishes. Groceries, there's no visibility of stock. So this management of, you know, if you order three bottles of water and some coffee and this brand, maybe the grocery doesn't have your coffee brand. A lot of that. So that's the pain point that you need to address with restaurants. Size of project, I mean, you order six bottles, one half liter water is heavy. You can't just fill. So there's, you know, that's not gonna happen probably with a restaurant delivery. So there's operational things that we'd already, you know, encountered difficulties and learned from it and built. So we were in a better position for multicatering than anyone. And we're the only company in Europe, by the way, doing multicatering. I mean, other parts of the world that we're doing, Asia was, for example, you know, companies in China and Southeast Asia and a region where, you know, they're like, they're like global on steroids. I would always say they just did everything. Incredible, incredible companies, companies like Gojek, Grab. So yeah, that really, and then the COVID moment sort of really said, wow, actually we were right, really confiding in our vision.

And in the, at what point does the McDonald's deal come in? Like I heard the story about McDonald's many times that it was a very important moment for the company. Speak a bit about it. But then also, as we discussed before, when you allow deliveries for this type of big companies, probably they're not going to like it. They're going to come after you for it. So what's the storyline there?

In the beginning of Glovo, of course, we didn't have any commercial agreements with some of the top brands, but our customers were ordering. So we decided, you know, we'll put them in the app. We'll put the menu in. We'll let customers order. We'll charge a higher delivery fee, obviously, to cover the cost because we don't have a commercial relationship with our restaurants. And McDonald's was, of course, one of those.

So people were paying more to order McDonald's?

Exactly. They'd pay more in our app to order McDonald's, but they'd still order. And it was our number one order at the time. And of course, I'd be calling McDonald's regularly saying, we're getting a lot of orders. Let's sit down and talk and let's make the operations. And they were just ignoring my call, never answered me back. They weren't interested in delivery anywhere in the world at that point. They thought delivery...

That he sort of was what?

I think at that time, being associated with delivery was being associated with lower quality brands. There's a perception that, you know, it's the small corner, you know, kebab place, Chinese restaurant. There's nothing wrong with any of those. But there was a perception that it was just a very non-attractive to be low quality. And as things were growing, and we were getting a lot of McDonald's orders, but we didn't have an agreement with them. So the courier would go there, order the McDonald's, pay with a debit card, pre-debit card, and deliver. And then we'd just charge a higher delivery fee to try and, you know...

Wait, wait. So that's a debit card that you gave to them?

Yeah.

How do you know that they don't go and charge for something else?

Well, I mean, there's an onboarding process and things. I mean, you know, generally, you know, 99% of people are good. So, I mean, yeah, we had a few issues of them using the debit card, things like that. That's part of the operational thing. That's the same with consumer fraud. Same with that happens everywhere, but generally worked quite well. A lot of, you know, being on top of the business now, being on top of the details. Operations has always been the key element of our business now, from the beginning, just being on top of everything. And then McDonald's changed CEO worldwide. If I remember rightly, a British guy actually in the US, and he said, no, no, delivery is going to be part of our strategy moving forward. So he told the business, and they created McDelivery. They signed a global worldwide agreement with Uber Eats, because Uber Eats were then expanding quite heavily outside of the US and everywhere.

How did this deal happen with Uber Eats? Did they invite everyone?

No, it was in the US. I mean, we weren't in the US, so I don't really know. We woke up in the morning with McDonald's signing a global agreement with Uber Eats. And then they were pitching in Barcelona, sorry, actually Madrid, they were pitching in Spain, for who would they be their delivery partner, because Uber Eats were not very big here. They're tiny.

How do you hear about this, by the way?

I mean, we were calling them, of course, all the time. Now they're going to delivery. So we were on top of it. We got to meet them. And yeah, there was a pitch, I think, you know, there was Deliveroo, Just Eat, ourselves, and the team.

What's the competition there? Is this on price? Is this on availability of drivers?

So we were competing head to head, I think, for market leadership in the market with Deliveroo then. They'd invested a lot of money in Spain and advertising and billboards everywhere. So we were probably, you know, the best two companies position-wise for market share, but we were still, but we, you know, we convinced them just by saying that we're going to, we'll do anything you need. We'll do something ad hoc for you. You know, you're not just going to be another restaurant brand for us. You're going to be the restaurant brand. And the team did an amazing job of convincing them. It was a high risk decision by McDonald's. They had to play for a little small Spanish startup with them. But luckily, they chose us.

Was Deliveroo inflexible, would you say, at the time?

No, I think they were less hungry, just less hungry. We were super hungry. We still are. But we just, you know, we just put all our effort into that. We sent our chief of product. They just showed them the product, how it would look in our app. We built them a custom version. And they said, you know, let's have a bet on these guys. They're so passionate and so hungry. Game change, of course. It was in those days, McDonald's were doing exclusivities. Now they work with all the platforms. But in those days, they wanted to just work with one in every country.

And what does game changer mean, by the way, at the time? Like, how do you see it?

Well, it's skyrocket orders. At the moment, you know, McDonald's announced publicly, although we're getting a few orders with them, like, the moment McDonald's announced their delivery and the operations obviously were integrated. So basically we, you know, they have our tech in their restaurants, so therefore they can prepare the order. So the time lowers everything. And we also work with them on excellent operations to make sure it's streamlined, to make sure that their, you know, their hamburgers and their Big Macs get well to the customer. They're very important. They're very focused on quality, repetitive quality. So we work with them to great, give an excellent service. And yeah, that went well for both. They're super happy with the agreement. And the Italian managing director of McDonald's in Italy saw what was going on in Spain. And actually said, well, that's going really well in Spain with the global, I want global as well. We were already in the Italian market and they chose us there as well. So yeah, yeah. But I mean, maybe if we didn't, you know, sign that deal, that we may not be here, we wouldn't be here today. So it's one of those things that look back on and it's a great story. Great job by the team, by the way.

So you have this deal and then does, first of all, how do you actually negotiate with the McDonald's on getting something from it? So you don't sell for free, for example, and so on, because they know that they are the brand and they're paying you so much. So it's like, how do you actually negotiate with them? And then also the second thing is like, when this happens, how many other restaurants come knocking at the door?

Well, I mean, negotiate the best you can. It's a small company. We knew we needed them for survival and we couldn't lose this account. So we were much more flexible than probably our competitors on negotiation. But in the end, it was a fair, it was a fair deal. They were fair in the negotiations and it was a win-win for sure. And then obviously other restaurants see that, but I think what's equally important is the fact that, of course, this positions us very quickly as market leader. And what restaurants really want are two things. We give a great service. And secondly, that we bring incremental volume. So if I can bring them 10 orders instead of five, I can bring them 100 orders instead of 50, you know, I'm the top choice, as long as I can maintain a very good service. So I think part of that allowed us to position us to quickly, you know, start being market leader and being able to go for a better service, better quality, more orders, of course.

So at the time, how many people are you at the company, excluding the Glovers, the riders?

So if I remember right, at McDonald's, we're probably around 80 people.

Wow.

80 or something. Yeah, we had a small office that was originally planned for 50 people and we ended up being like 120. And then there's people going outside in the street to do calls because we had nowhere. It was pretty crazy because we need to get a new office soon and it takes a while to find a big office and you're growing so quickly. But yeah, it was fun times.

Was there any similar moment with any of the supermarkets, for example?

Yeah, I mean, the thing about supermarkets was fairly interesting because we were the only one, we were the only multi-category player in Europe. So we were not on demand for supermarket, it was very rare. And also supermarkets had their own e-commerce platforms by then. So they were selling online through their own websites, never same day. In those days, it was always the next day and Windows still exists today, by the way, many supermarkets still operate in that way that, you know, I'll deliver you tomorrow between 10 and 12 or 12 and two. So the on-demand side of things was new for them. And that was tough convincing a lot of supermarkets as well. I mean, we had a lot of visits to the top brands saying that we're not competitive. No one's ordering two or three things from your supermarket. Your order is big baskets, planned purchase. You know, go in there and I'll order all the stuff and you'll deliver tomorrow. And normally it's like, we're small baskets, very convenient, last minute, you're not in that space, you're not going to be in that space, by the way. It doesn't make any sense economics and my economics work. So why don't you join? And slowly we convinced one and two, you know, generally it was always no, then no again. And I think, you know, our head of quick commerce, we call everything outside of restaurant business, we call quick commerce, which includes groceries, you know, pharmacy, electronics, flowers, toys, pets. Pets is an interesting one that's growing. So yeah, we get a lot of nos. And you know, quick commerce always say, you know, every deal you need at least 10 nos. So every time we got a no, it's a positive sign because it's one less till the yes. Super.

Is there some sort of third category where you would say it's in a similar kind of importance in terms of the revenue size that they bring and the repetition of the customers they bring? If it's the first one is food, the second one is groceries?

Yeah, it depends on the, we're in 22 countries and very different places now. So we're in Southern Europe, Central Eastern Europe, Central Asia, and Africa. So there's different contexts in different places. I'd say the most advanced by far, and it goes a little bit with, you know, the markets educated that they can, that they know that they, people know they can order groceries online, right? Big brands are doing that. There's been some vertical operators as well that do groceries. And of course there's global, which, so that's definitely the number two category in the fastest growing area of the business, right? And I think, you know, I think quick commerce, and we call it quick commerce, is going to be super exciting. In the next five, 10 years, it's going to, it's like, it'll be the fastest growing area of e-commerce. And the rationale is simple. You know, pretty much in most big cities today, you know, anything you buy online, which today is mostly through e-commerce, of course, those products, you know, 80% of the time are actually in your city. Yet you are ordering them through, you know, an e-commerce giant or a website that the product is thousands of kilometers away. And obviously it's impossible to deliver that in 30 minutes. It's often impossible to deliver in 24 hours or 48 hours. So you get it. And there's a whole logistics nightmare that, you know, if I can get that same product, you know, my trainers or my shirt or whatever I'm buying, and it's available in my city, I can just come in 30 minutes at the same price. It's the same price. Then a large percentage of them are going to do it. And then you have another factor. There's no returns, right? One of the big things about e-commerce is, you know, I don't know if you buy online, but I do, and I'm never at home. You got the company saying, I'm here. No, I'm not there. You come tomorrow morning at this time. No, I can go. We only do day deliveries. And so it's a nightmare, right? It's a whole lot of frictions there. The great thing about ordering on demand is you're there. So, you know, you know where you're going to be the next 30 minutes, the next 40 minutes. So basically delivers and you get it. And I think that's going to be tremendous. And I think the large e-commerce companies, and we know their names, and it's not accidental, but they're moving closer and closer to the consumer. You know, companies like Amazon used to have their warehouses thousands of kilometers away. Now they're building them on the outskirts of large cities.

Back to the story. They do have Amazon now in the US. Yeah. Yeah. If we go back to the story, you have the McDonald's deal. And then at what point do you guys start expanding to different countries? And then how does this work really? Like, can you put me in the ground? Like, who do you send first? How does this expand? How does this work?

Yeah. So we started in Southern Europe. So this was Spain, Italy, Portugal. And we set up operations in Paris. We operated there for a number of years. We never expanded out of Paris. Paris was super competitive. We didn't have the capital to really double down on France, huge market. So we focused on Southern Europe initially. And once we started getting operations and learning what worked and what didn't, we launched in Latin America.

What countries in Latin America?

Pretty much a lot. Like Brazil, all the way to Central America.

Oh, so you decided one day, look, I'm going to go to 10 countries.

Yeah. Capital. And we convinced our investors that Latin America is... And we really built launching teams.

What's a launching team? What consists of...

It's probably a handful of super smart, young people who have no problem just getting their bag, traveling across the other side of the world, setting up thing, setting up the operations. So that's basically setting up the commercial team to try and get the partners. So the restaurant, stores, commerce, the local commerce, getting career operations, getting together so we have enough careers, looking for GM, preparing where, you know, maybe the launch, the marketing plan, to start building this. So the day one, when we actually open the app, that everything's going to work. So that's a launching team. And then what they do is they would go to one country for three months, put up all the framework, and the whole team would then move to the next country.

Interesting. Yeah. Are we speaking about five people, 10 people, 50 people?

It's around three or four, generally.

Three or four people. So three people go, they start... What's the sequence of things? Is this the marketing approach? Is this the office?

It's everything. You know, we set up the legal entity because we operate, you know, we set up a legal entity in every country we operate. So they set up the company. They start looking at one person's, you know, more the operational side of things. So starts getting the advertising for getting couriers that we're launching this business in a month or so. The partners, we start reaching out to the restaurants and the stores saying, Hey, we're launching. Do you want to be? Are these the conditions? Just like, basically, street, no guerrilla street work, get into a co-working. Sometimes, you know, start looking for a definite office, you know, basically trying to do all the bureaucracy of launching. And then we call them launching teams. And these, to be honest, these, the launching teams have become some of the best senior directors that we've had in the company because they've really felt the pain. They understand how the business works underneath. Amazing. They need all the small things.

You mentioned GM, by the way, like, what makes a good GM for each of these locations?

A good GM is very 360. Good reference for the team. Good manager, but also respected manager, but also, you know, willing to pull up his sleeves, her sleeves, that they, you know, get down to the ground, willing to talk to partners, willing to be on top of the operation. So very hands-on, I would say. But at the same time, a reference and transmits, you know, our image, our culture to all the, you know, people they're talking to, which are often, you know, our partners, which are restaurants and stores, big, large chains that make them feel that they want to work with somebody like Glovo. So it's a mixture, it's a big 360. We value a lot of culture. We've, you know, our values and culture has been very important from day one. We've worked on them very, we don't renounce them in the sense that it's our culture. They're our values, but at the end of the day, it's more important than that, in fact, than skills, in my opinion. Passion and culture, skills can be learned.

And then you launch in all these countries, what happens? And how do you actually know, like, what works, what doesn't work?

So we had mixed experiences, most of it positive in Latin America. So we launched, you know, I think 10 countries. And, you know, generally business was going well in many countries, you know, Argentina, Peru, market leader, very close to market leadership in pretty much most of the countries. Brazil, which to me is almost a different continent as well. It's a huge country. We struggled a lot. And I think Brazil was a very good example of fail fast. So we launched in Brazil, great local operator still is today called iFood. They had, you know, 95% market share, great operator had all the great brands. They were working really well across the whole country. We came in, coincided that Rappi, which was our main competitor in Latin America, SoftBank behind them, Uber Eats as well, will launch Brazil similar time to us. So all of a sudden you had four players, one operating amazingly well with huge market share, the other two with super deep pockets to just throw money at the market and Glovo. Literally within six months, we said, this is going to kill us if we continue fighting in Brazil. So we closed down the business there and lost a lot of money very quickly.

What's it spent like when you're losing a kind of market like this?

I don't remember the figure, but we, you know, we probably spent nearly 30 million euros in like six months and we decided to look.

Wow. 30 million euros in six months.

Yeah. Wow. But it's a great decision. And then you realize, you know, that's not how we want to enter the market. We also launched too many cities. Our standard playbook is you launch the largest city in a country and you get that right. You start getting the operations right and you get the differentialities between the different countries can sometimes be very significant. So you get that right and then you expand into secondary cities. That's our standard playbook and we would do that everywhere. Brazil, for some reason, don't ask me why, you know, we went to 12 cities all at once.

Interesting.

And we didn't get it right and we weren't and...

None of the cities, by the way?

It was very competitive. I mean, again, iFood was there. They're doing an amazing job. Why would anyone want to swap to Glovo just because I'm spending advertising? And then I had my competitors, the new competitors coming and spending advertising. In the end, it was a great decision. And in the end, LATAM, we had an opportunity to exit. Pedidos Ya, which was one of our competitors in the market, which was owned by Delivery Hero, they made an offer to acquire our business. And we thought, you know what, this is so competitive, Latin America, with what I said earlier in Brazil with, you know, Pedidos Ya, Uber Eats and Deliveroo. And we were doing okay and, you know, we had a great offer and a good return on investment because we invested in the market X amount and, you know, we got, you know, three or four times back. And we got that capital invested in Eastern Europe because we were going really well there, which suddenly started picking up and much less competitive operations were really working. And I think it was a great decision, you know, and we're pretty much market leader in Central Eastern Europe today. And I don't think we would have survived in Latin America because just for the capital. Operationally wise, we were very competitive. We always had a very good operations at Glovo, I'd say, superior to our competitors. But sometimes if you haven't got the capital to do that and, you know, then it's difficult.

Understood. And then from the, what about the US? Did you guys ever launch in the US? Why not? I know DoorDash is blowing up there. I'm using them often in San Francisco, but like, I don't remember having other alternatives, right?

It's very competitive, huge markets, huge players. You know, at the time you had DoorDash, at Uber Eats, obviously in their home market. On the West Coast, you had Postmates who do a great job. You had Grubhub then, which was the income, they were the gen one player. Remember the one that an order would come through, but they generally pass it on to the restaurant, the restaurant would do the logistics. So you had some big players with, we avoided super competitive markets. Certainly, you know, UK was also very competitive. In the end, we ended up leaving France, we only launched Paris, we had, you know, very small team, we ended up getting about 10% market share in Paris at 1.12%. But in the end, it was a market that's very competitive. So we ended up focusing on markets where we, you know, we could either be leader or co-leader. There's a lot of advantage of being market leader, or very close to market leader in the country where we operate. And we focus that as part of our playbook. You know, is there an opportunity here? How good are the local operators? What's the competition like? And things like that. And we started really focusing on that. So we avoided all these huge competitive markets, typical ones in Europe, then with Germany, you know, France, the UK, obviously the US, we didn't even look at.

You mentioned Delivery Hero before. How do you let a competitor invest in the company at the first investment you guys received? Like, was there some sort of conversation internally? Should we take money from them or not?

Yeah, of course. Of course, there's, you know, the board and investors, current investors were very, you know, thought, whoa, you're letting a potential competitor in. At the end of the day, I think it comes down to two things. There was some trust there. Why is that? I don't know. You know, Nicholas is an entrepreneur. To have an entrepreneur investing with that mindset, it was very clear that he wanted us to stay independent, that we're doing a great job. And there's a bit of trust there. And secondly, to be perfectly honest, I mean, I mentioned this earlier, we, you know, it was tough for us fundraising. Anyone who would write a check in those days, we'd take it. And so it wasn't a question of, you know, I asked, I'm often asked, you know, by entrepreneurs, how do you choose your fund to invest in? Do you have options? Yeah, we didn't. We'd take anything. And that's the truth. I mean, it was the biggest struggle we had every single round. And also, in those days, everything was so competitive that we were cash constraint, literally, that we'd close a round. And literally, we'd have to begin fundraising again. And we'd be, you know, we'd be, we'd be doing another round in nine months. So it's consistent because just to be able to compete. And remember, we're businesses that generally in the first few years, you're not profitable. So, you know, it's not a business that the unit economics work day one, like maybe ride hailing would be a good example, right? Hailings, the units economics are fantastic. Now they just charge a commission to the driver and, but ours, we actually have to factor in the cost of delivery that we end up paying. And in the beginning, it's not profitable. So to cash burn business at the beginning.

I see. And then at what point do you start thinking about an acquisition? Was this close to the exit or was this much earlier? And what was the rationale behind?

I think we got to the point where, I mean, Delivery Hero was a significant shareholder of the company because they'd invested every round continuously.

Oh, in every round. At that point, like what percentage did they have?

They were getting close to 30%. They were our main investor at that point. And I think, you know, we sat down and with Oskar, we said, you know, I think the reality is it probably makes a lot more sense that we, that we joined Delivery Hero and we become part of their portfolio companies. Then we weren't competing in any countries with any of their other brands. So that's a very important point. You know, we were in Southern Europe, Central Eastern Europe, Africa, and Central Asia, which are areas where we operated in. And there are other brands with other parts of the world, right? The Nordics, Korea, Latin America, they pretty much acquired our business. Asia and Middle East as well. They're, you know, market leaders in the Middle East as well. So there was a lot of synergies there. And then the second thing is Delivery Hero is a holding group of different brands, right? Delivery Hero, there's not a Delivery Hero app. So they manage a number of leading brands. Pretty much most of them are leading brands. So market leaders in the regions. We knew that we'd have the autonomy to still run Glovo and still be Glovo and not feel part of a huge multinational. It's one thing that would have maybe if Uber Eats would have killed the Glovo brand, obviously if they'd acquired us. Uber Eats, if they acquired us, they would kill the Glovo brand and we'd be Uber Eats today and we probably wouldn't be here. They wouldn't need us. They wouldn't need our tech team, they wouldn't need our 800 engineers that we have in Barcelona, they wouldn't need our... because they'd integrate that, which is fine. So I think there's just all roads seem to make sense there. Very happy we did that, a great relationship with them.

What changes after the acquisition? Is there any significant change? What's the first year looking after?

First thing, poor Oscar doesn't have to fundraise anymore. So that's the biggest thing which takes a lot of focus off. The CEO, 60% of his time, 70% of his time fundraising. So that's the first thing.

On that point, not needing to fundraising anymore. Does this mean that basically if you wanted to expand to a new market, or if you wanted to expand the business in some way, is Delivery Hero investing that amount of money so you don't need to do it? Is this how it works?

No, it generally works. You plan your budget, right? Then you say what you want to do, you know, this year, we've just gone through the process for 2026. And you'll align what makes sense and what doesn't. And you'll have those discussions. The same way if you're doing the budget internally, we have the same discussions within the C-level team. And you sign on a budget, you know, and Glovo today isn't profitable. We're hoping this would be our first profitable year, but we've had to invest a lot in the Spanish market. And then what's the objective? And today, the case of Glovo is let's move to profitability. Most of the Delivery Hero brands are profitable. And we're one of the last ones. So that's the focus of the business. And we're all aligned on that. So does that mean, of course, we'd love to launch other countries. Does that mean that we're more focused on profitability instead of launching other countries? Absolutely. It's up to people to decide that. But that's the standard business. I don't think nothing that hasn't changed because of Delivery Hero. We'd probably be doing the same decisions if it was Glovo. How much capital can we have? How much are we willing to invest? Can I convince my investors or can I convince my board that we should be doing this?

There's a couple of other questions I wanted to ask about this. You get some sort of crisis from Spain and about the Globers and all of that. And I want to understand from you, when you have some sort of crisis that basically there is no obvious answer and no obvious way of dealing with that problem, how do you solve it?

In what sense? Like, sorry.

You have this type of problems that you don't have the immediate answer that is you have to go and do this specific type of solution to this problem. Many times you have a big crisis that basically you don't, there is no obvious answer, there is no way of dealing with it. Like, when this happens to you, how would you advise someone to be dealing with this type of problems?

Just get on with it. I mean, there's no problem unsolvable, right? It's how you solve it. You can solve it partially, you can do it, I mean, just get down and just get on with it. No? Roll your sleeves up. Building a company that touches so many pain points and so disruptive and, you know, we're a company that not only touches the future of work regulation, but it also touches local commerce regulation, mobility, data protection. We're touching so many areas that is a very complex business. So obviously we're going to encounter issues, crisis, different crisis in different regions. You know, Morocco today, which is, you know, a very important market for us, are not really thinking about, you know, freelance versus labor contracts. They're more worried about rider safety, couriers, how they are on the roads, things like that, which in Spain, it's not an issue because generally there's road traffic and road safety and road rate compliance is generally accepted and most people do it. So there's things that are very different and I think the best ways, you know, doubling down ownership, ownership of the problems, you know, make them yours to fix, make sure you get the right team, listen, listening to smarter people in the room, and then you double down on it and just fix it.

In the team culture, how do you grow the teams? I spoke with multiple teams in the past that they have super small teams that make decisions. There are others that most of the decisions come down. How is Glovo set up internally in that sense? And then the second one is, I saw Oscar mentioning about becoming more political over time and communicating in a more political sense, that it was a big mistake that he had done and he changed saying things as they are afterwards. How did you deal with that? Like, did you have something similar? Do you have advice for entrepreneurs how to keep coherent culture over time?

Yeah. So the first question a little bit about, I think we're quite a democratic company in the sense we have a lot of inputs on key decisions, you know, beyond the area owner or the C-level who owns a certain thing. So I think we're a company that I would like to think we're listeners. We listen to other smart people around and, you know, I can be wrong and I'm willing to admit that I'm wrong. And I think that's how generally we make decisions, the big ones in the company. Secondly, sorry, what was the second question?

Yeah, the second question I've seen, I've seen Oscar at a recent interview that he did was explaining that a lot of people, a lot of investors have been telling him over time, you have to change your communication, you have to change the way that you say things because this doesn't align with the culture and so on. And then he said he became more political, which actually broke the company culture and he needed to change this later. Did you have something similar?

Yeah. So I think, as I said, you know, our culture has been very important from day one, even when we're a small group and our values we've identified really haven't changed over the last 10 years. We've adjusted them, you know, we've made them more clearer, some of the texts people didn't really understand, you know. So we've improved them and how they're described, but really the core values have hardly changed the basics of our company culture. And I think what happened at some point in the growing pains when there was a moment when to get staff and to get high quality performers and at that point we're competing against, you know, trying to bring people who were based in London to Barcelona or based in Amsterdam. This is difficult. It's very difficult and then you end up being a little bit more compliant and you be a little bit flexible and maybe allowing employees to be a little bit more entitled, you know. And I think we probably had a couple of years where we were a bit guilty of, you know, adapting our culture more to attract talent and to keep talent instead of the other way around. And there's a point we felt we were making a mistake that we should adhere to our culture and it doesn't matter who it is. This is our culture as a company and if you don't want to adapt, it's absolutely no problem. You can be an amazing professional. There's other cultures in amazing companies, you have a totally different culture and they're amazing, even more amazing than us. And you'll probably find a great place there, but this isn't for you and vice versa. I think we did a step change in that sense. It's part of the growing pains of, you know, building a company with, you know, 3000 plus employees from five people in a small office in Barcelona in record time. And yeah, it was good learnings, good learnings and I'm glad we realized fairly quickly that, you know, that our culture is very important and we're not the perfect company for everyone and we never will be and we don't want to be.

So it's keeping the identity, saying things as they are, and it also filters people out that you don't want them to be there.

It's not that we don't want, it may be the other way around. I mean, you can have super talented people doing a great job, but culturally, if they don't fit in with their colleagues, it's going to create issues that go beyond. And I think it's more about obviously us not wanting people who don't fit into our culture. We do that in the recruiting process and also, you know, the performance reviews are heavily weighted on values, not just performance, heavily weighted. But it's also somebody who in that company doesn't feel this is the vibe they want. And they should, you know, they should find a company where the vibe is theirs and they're going to be super passionate. And I think it's fantastic. So it's very mutual for me, you know, in the performance reviews culture and values and alignment to that is, in fact, in my case, the way I is more important, actually, even than individual performance. You can have a bad quarter, you know, a bad semester performance wise for various reasons. But if you're culturally aligned, then I know you're going to recover next quarter. The other way around is very difficult to change somebody's culture, you know, somebody's not humble, probably will never be humble. They can work on it, they can do, but if their natural state is not to be a humble person, then I think you're swimming against the waves.

What are the... Before we jump into it, I want to ask a few questions there. Is personalization going to be playing part in the quick commerce in the future? By that I mean, is there any world that you know information about the person, like for example, the type of goal they have, some sort of... I know their health, I know where they want to, if they want to lose weight or if they want to add weight and so on. Do you see this playing any part of the quick commerce in the future or not?

Yeah, I think it's inevitable. The amount of information that we give to technology, you know, I have an aura ring. And I think, you know, you can see the beginning of that, of what, you know, AI and agents and how we interact with agents and it's going to change, I don't know, I'll probably have my personal agent or agents who know a lot about me, be very useful for me for that agent to know about me, because they'll be able to help me make decisions, they'll know my emotional relations and obviously that has a direct line to how I consume products, right? So that's definitely going to happen. How it happens, I'm not exactly sure. I'm not sure if they, you know, when I want something, I'll go to Glovo and then there'll be an AI that will help me make the decision and know a lot about me or it could be the other way around that Glovo plugs into and my agent uses Glovo, we'll see. You know, we'll just, we just need to ride the storm, be very, very alert and get on the leading trends. I think that's going to happen for sure, it's inevitable. And I think it's actually positive, right? It's positive that, you know, that I can have services or things that are actually beneficial to me. It's going to be, I think it's going to be exciting, it's going to be hugely exciting.

You reached this journey, you mentioned 10th, 11th year of Glovo, what's the, there was an acquisition happened, like how come you stay in Glovo? How come you're still there and you keep going?

Yeah, I'm enjoying it. You know, I'm having fun. I'm learning. Every day I'm learning. I'm surrounded by super smart people, most of them younger than me. And you know, hopefully I'm still useful. Hopefully I'm still bringing value to the company. If those things work, then yeah, then I'm super happy. And you know, I mean, Glovo will always be my baby. And it still feels that way. As again, we, you know, we've got autonomy and how we run the business and our own brand and you know, stuff we built is still innovation. So I think those elements are there, fantastic. And if they're not, then you know, do something else.

There is this, when there is no startup community existing in a country, there is always this message that we need a big success. And if there is going to be a big success, then more people are going to be inspired and so on. In Spain, you started very early on, like I'm guessing the amount of success around were not that many. You achieved that with Glovo. Did you actually see things changing because of the success of Glovo?

Yeah, you're absolutely right. I mean, one of the biggest issues I think we had from fundraising is, you know, that we weren't based out of London or Berlin or Paris. I mean, I think that definitely hindered us with big international funds. There hadn't been some major successes in Spain and certainly Barcelona. The largest Prius, I think was Privalia, which is from Barcelona, great guys, by the way. And I think they did a 500 million exit, but there hadn't really been any massive success stories. And VCs told us that, by the way, when we were going there and there hasn't been any successes. And VCs...

How does this make any sense? You guys were expanding in different places. So why would it make sense that you are based in Barcelona?

Our headquarters were there. I mean, we love the city. It's a great place to build a business. It's a great place to do talent. What's your question exactly?

You expanded in multiple countries, so you are no longer a Spanish company, let's say. The markets that you are at...

Yeah, but I mean, venture capital is very conservative generally. I mean, they're looking to cover their risks, right? They can have a bet on a British company or a French company with the same numbers as a Spanish company, the lack of knowledge of the Spanish market, of how talented people are. So it's not, you know, it's quite conservative considering most people think they're, you know, huge. They're not entrepreneurs. They're actually investing other people's money and they want to have safe bets as best as possible. And we were definitely not a safe bet.

So was an ecosystem created because of the success of Glovo?

So again, when we started Glovo, there wasn't much of a VC ecosystem in Spain. There was a few funds in Madrid who were doing, but they're very small funds. So pretty much after our Series A, we had to go abroad to fundraise and we had to go to Europe and luckily we were successful and we even went to Japan, Rakuten invested in us from Japan, which was super cool. And then answering your question about, you know, now that Glovo has had a relatively high exit, does it, I think, you know, many people have told us that, that, that, you know, thanks to Glovo positioning Barcelona on the map, it's allowed, you know, other unicorns to appear in this, you know, there's, you know, there's a handful of great companies now in Barcelona, amazing, you know, Travelperk, Factorial, Exotica. These are companies that, and I think it certainly helps them that there's been some success stories in Barcelona and obviously we're one of them now, we were one of the first unicorns in Spain.

Why doing a fund?

I've been investing for a number of years and specifically the last five or six as a business angel. And Oscar was doing the same actually, and we coincide in quite a lot of investments and we just thought, wouldn't it be great to, you know, professionalize a little bit what we're doing, which to be honest, business is very emotional, chaotic, you're not really thinking about, you know, structured ways of investing and, and I think it was a great learning experience for us to learn, you know, how to be professional investors with the investment team. So, yeah, in essence, it's really professionalizing what we were already doing and then surround us with investors. Now we're, we're operators and entrepreneurs, but we have a great investment team. You know, Adam, other partner, he's Exotomico, one of the biggest funds in Europe, super, you know, disciplined on where we invest and everything. So they bring, I think they complement each other really well because we're very operational and we understand the insides of how the companies work and, and everything. And you know, we've felt those pain points and they've got the investor discipline that we work together. So, so yeah, I'm very excited and as well, me personally, it's learning again, it's learning a different part that I, you know, never done structurally, I'd invested, but I'd never looked at it as a professional way of doing things. It was much more emotional. I like this founder, I like the idea, yeah, I'll put a ticket. Never think it could be a small Spanish win or a huge, you know, I didn't think in those terms. So yeah, it's very, very different, by the way, as well, you play, and also you're investing other people's money, which is a responsibility, whereas when you have your own money, you're just investing it. So you don't care, but you're, you're less, you're less concerned, you're more willing to risk take. So yeah, that I think is exciting and things are going very well.

What's the type of founder that comes with the perfect metrics, but you don't invest in them? What characteristic do they have?

I think self-awareness and, and being grounded is very important.

How can you tell when they meet, when, when you meet them, how can you tell about that?

There's not one magic answer to tell, you know, people can leave details of, you know, and the things, if you're not grounded, you're not, you're not humble, you're not, you'll end up not being a team player. And companies are built with through teams, you can have rockstar CEOs, but there's teams and talent wants to work with people they want to work with. And we all know that, this is not rocket science, I mean, top talent doesn't want to work with assholes. So they'll, independently of their amazing, got amazing idea, ruthless execution, at the end of the day, the growth will be hindered by not being able to have people of quality working with you because they don't want to work with you. So I think it's a bit of that, I think probably be the best answers, a lot of, a lot of ways that then, you know, other, other traits, generally the description you said of a, of a potential founder is not that, because I, to get to where they were, the description you gave is they probably hard worker. But one thing as well is, you know, this is not going to happen just because you hit the lottery. This is going to happen through hard, disciplined, consistent work over time. And also to hit all those walls that you're going to find, or the crisis, you need to overcome them. So you need to be persistent. That's a trait. Generally founders who are, you know, what you described as excellent with a great idea and everything, generally they would be that or else they wouldn't be there at the table. But sometimes you find a founder who's maybe coming to a big company, who's managed a lot of people and now wants to build a company, so maybe he's not that killer that you need to really go over that and that persistence and consistent hard work, especially in the early years to make this actually work and get the traction.

For the fund, like for the next five years, where do you want the fund to be? What kind of investments do you want it to make?

So Yellow is a pre-seed fund, we do some seed investments as well, and we obviously follow on on some of the best projects. You know, it'd be, if I had to describe it in five years time, it'd be when great founders in Europe are setting up the company and they have the idea for us to be their first phone call. They want, they see Yellow as, you know, the best, one of the best pre-seed funds in Europe who are perceived of helping founders. One of the great things about Yellow, and I think all our portfolio would back that up and actually they've helped us get deals because most of the deals we do in Yellow are very oversubscribed. Most funds want to get in there, we're a new brand, new guys on the block. We're very proactive in helping them lead generation, getting clients, you know, finding talent. We're quite proactive with operational ideas, obviously, I have Oscar and myself there. So I think that's our superpower of really, you know, obviously we don't lead, so Yellow's, we're not the largest investor in the rounds, yet we're generally perceived as the most proactive in helping. And I think that's a strong, strong point that we're going to really focus on. But yeah, ideally it would be the Yellow brand is there and it's perceived as, you know, the best or one of the best pre-seed funds. And when I'm doing a round, I want Yellow in there.

Most of the people that want to raise their first investment, so when they don't really know, they expect you to say, like, my product is really great, my metrics are really great, and then to reach out and so on. Can you describe a couple of ways that are the best ways that you have seen until now, how people approach you? And then second, what would their business look like or what did they look like as a founder that convinced you to invest?

Okay, so our perception on this, I mean, we're trying to invest in the best founders, you know, in Southern Europe, in France, in Dach, in Central, you know, invested in Germany and Switzerland. And generally what's happening today is these top founders with a good credibility in the past, either built a startup, built a startup, did all the fundraising, comes from a C-level scale up. It's pretty much the opposite is happening. Top pre-seed funds are, you know, throwing term sheets at them. So they're just oversubscribed. So our job at Yellow is, you know, is A, to convince them we're a good partner, that we complement their other investors very well, that they want us in, because generally, as I said, they're very oversubscribed, so they can pretty much choose investors and that's the profile we're looking at. We're looking for really top founders who can build the next unicorn. We co-invest with the leading European funds, so some of the big names we've, and also build a relationship with those funds, because if we're helping their portfolio companies, and we're perceived as being very operationally friendly to the founders, the next time they have a good deal, they'll call, hey, you should get Yellow in there to help you. And there's a bit of that beginning to happen. And of course, the regions where we're, you know, very well centered, Spain, Southern Europe, Portugal, if we see some good deal flows, funds, then we'll probably call some of the, some of our partner funds in Europe to maybe lead the round.

And is the goal for the fund to increase in size over time?

I think the tendency will be, of course, I mean, we want to stay pre-seed, it's a sweet spot and pre-seed and seed, but, but yeah, over time, I think tickets are going to get larger and Browns are going to be around, especially these top founders, right? You know, get close to the U.S. and you know, you have somebody who's built something before in the U.S. and they go out there, they get thrown 20 million. It's not happening yet in Europe, but it's, that's, I think that's going to be the tendency. And therefore the fund needs to grow in accordance with that.

Okay. For the, I want two more questions. The first one, I cannot go without asking you about your thoughts around AI. It's trending today and so on. Like what do you think AI is going to be in the next three years, five years?

I think everything, everything we're reading about it, it's going to be, I think there's different areas. So I can tell how we use AI today, which I think we're touching the surface as a company, but we really build it. So first of all, our, our logistics algorithms, we've been using AI and machine learning for many years to optimize, you know, any second we save, you know, doing millions of orders a day, any second we save on delivery is, is a lot of money, you know, it's incremental money for the courier because he can do more orders that hour, it's better UX for the consumer. So, and what's happened more recently is we're. Now integrating into customer support. And remind you, Glovo has three customer supports. Very different. We give customer support to our customers, person ordering the product. We give customer support to our courier if they have a problem, they have a different app. And of course, our partners, the local commerce that's selling on our marketplace, on our platform. It's restaurants, stores, they have a... So all of them have a different need of customer support. We have three levels of customer support. And integrating AI into that, obviously, typical 80% of issues are probably the same. So you can do the front level, automize that. And then what it does is gives the human part much more quality responses. And they can spend more time on the quality answers without incremental costs. So I think that's the tendency short term and today of how customer supports. And internally, the team's obviously evolving, I mean, AI for image generation for our restaurants and stores now. So now they can help generate cool images that will attract users better because using software. So a lot of that is being built into the platform, super interesting, basically optimizing and improving things that were generally done manually. And then internally with the teams, obviously, we have the tech teams who are now using AI to code instead of coding everything themselves, now they have help so they can actually think more and be more analytical and produce more code in the same amount of time than previously. And then finally, what I think we're doing quite well is we're pushing departments to show how they use AI on a monthly, quarterly basis. So how have you used AI in our OKRs? So what service have you used? We're forcing habit change. Now for me, I want to do a report and write it up. Typically, I would have wrote that myself a year ago and wrote it all down. Now it's the easiest thing for me to continue to do it that way. But now I can use AI to help me write it and everything. And in the end, in the beginning, it doesn't save you time, but very quickly you realize well it does save me a lot of time. So that allows me to do that same report in X amount of time and that free time I can use for something else. So it becomes forcing teams to really integrate it into their work stream.

To be more agile, more efficient, and therefore free up time to do other things. Maybe more analytical, maybe actually using your brain instead of doing manual stuff. So I think we're in that phase. I think the future in our industry is that somebody's going to invent a great UX with AI for buying online or for e-commerce. You know, a little bit like what Steve Jobs did with the iPhone, right? Steve Jobs came out and everyone just went, wow, that's a game changer. The apps, the interface, the whole screen, and obviously everyone copied that. Now that's a standard. And I think there's going to be a company that's going to come out with an amazing UX for e-commerce. It could be voice, could be text, it could be a mix of both plus a menu, I don't know. And everyone's going to go, wow. And then it'll change the way we interact with our phones. Now with our phones today, maybe with our glasses, and I think that's going to be the game changer where society is, wow, this is incredible. And you'd say maybe to your app, can you please order me a pizza? The same one I had, I think it was last July or last week or something large. And yeah, I'm going to be home at 7:30. You forget about it now. It'll be something like that.

Speaking of, in 10 years from today, what is Glovo like?

That's probably, I think, a part of people's lives for sure in the cities where we operate. You know, I think 1,800 cities worldwide. So it'll be a reference for people in the cities, the marketplace where you can pretty much get everything immediately. A lot bigger. And I really think if you talk about 10 years, local commerce and retail will be 80% of Glovo's business compared to 20% restaurants. I think once consumers realize that digital local commerce is a reality, they'll use technology like ours, our platform, to pick it up, for us to deliver it, to order it. I mean, you know, part of a system could be, hey, I'm walking home, do you have that in stock? Save it for me. I'll pick it up on the way home. That's part of our digitalizing that. And I think anything that's not, I call it entertainment. So anything that's not, you're doing it for fun, like necessity, I think will be ordered online digitally and hopefully through most of it through Glovo. And I think everything else that's more fun, like, hey, let's go shopping. Now this famous Saturday with your partner, hey, should we go shopping? You don't need to go shopping, but you just go and you wander through the shops and it's more discovery and somebody giving you advice, yeah, actually, I've got this, could be around food, gourmet food. It could be around clothes. It could be your next pair of trainers. There's a discovery part, which I think people still want to walk in and have that sensation. But everything else, I think it makes no sense. I mean, it's not fun going to get, I don't know, the washing up liquid or the toothpaste. That's not fun. That's not discovery. And that's the sort of thing that I think is going to move online. And I think the great advantage of Glovo, again, is we're so near to the consumer, right? So local commerce and the consumer's immediate, so that makes it immediate and we can deliver in 30 minutes. And that's unique. And I think once that starts taking off, it's going to be like a snowball. And I think quick commerce is going to be absolutely huge.

With that, Sacha, it's been an awesome conversation. Thank you so much.

Thanks a lot. Thanks a lot for the invite.