Pedala is a bicycle-based urban delivery social enterprise that trains, hires at-risk youth as deliverers, providing them with livable wages and preparing them for new career and education opportunities. The enterprise provides services for the delivery of documents, items purchased through e-commerce sites and food. The delivery service is environmentally friendly, faster and cheaper than its competitors.
Photo: Bruno_Fujii
In late 2019, three years after joining the NESsT portfolio, Pedala was acquired by Ame Digital, a fintech company controlled by B2W Digital, one of the largest e-commerce companies in Latin America, and Lojas Americanas. How did this local Rio de Janeiro startup, generating BRL 1,332,000 in sales in 2017 and employing 49 vulnerable youth, become an attractive model ready for scale in such a short period of time?
What Pedala offers:
There were a series of ingredients in the Pedala model and timely strategic decisions made that allowed the enterprise’s two founders, Alexandre Messina and Vinicius Justa, to take the company to new heights.
First was the attractiveness of the solution itself. In 2017, the package delivery industry in Brazil was valued at US$24 billion per year and growing, powered by 1.5 million “motoboys” who delivered packages on motorbikes. Only 23% of motoboys work under formal contracts and with legal registrations, resulting in poor employment conditions. Alexandre and Vinicius turned this reality on its head. They launched a company that would train, provide safety gear, and employ young low-income people, many coming from the favelas, mostly in the informal economy, without hopes of education or work mobility
Further, the solution was green. By contracting Pedala’s services, clients would be supporting one of the most efficient forms of transportation, cycling, as opposed to more carbon-intensive options. Pedala uses already established bike lanes, circumventing congested and dangerous traffic. In sum, Pedala and its 200 clients avoided 85 tons of CO2 emissions per year through its cycling and logistics operations during the time of its exit.
However, an attractive product or service is not always enough. There were a series of strategic decisions made by Pedala, with the support of NESsT and its advisors, that allowed the company to make key pivots, expanding its reach, reducing its costs, and improving its overall visibility and branding.
The first strategic decision made was to stop food and document deliveries and concentrate on e-commerce.
Secondarily, the enterprise decided to stop investing in permanent locations. Instead, Pedala decided to invest in a less costly and more mobile system of storage facilities. Pedala began to rent storage units in key delivery locations around the city, making it easier and faster for employees to meet deliveries in a wider radius, while also reducing the costs of materials and time spent on office management
A third pivot was a change in branding. Pedala was originally Ecolivery Courrieros, a franchise of a company by the same name based in Sao Paulo. The enterprise decided to spin out of the mother company and then to change its name to Pedala, a friendlier and more visual brand, representing its unique value proposition.
The fourth and perhaps most distinctive strategic decision made by Pedala was to offer a diversity of contracts to their employees. Based on the findings from employee surveys, Pedala began offering the more independent option allowing the bikers to set up more flexible hours but always with the option to transition to permanent contracts if they so desired.
Tips for a Successful Exit
Passion for social impact: When Alexandre and Vinicius first set out to find employees, they realized that many of the applicants were from low-income backgrounds and were struggling to get hired elsewhere, whether it was due to their lack of work experience or to a criminal background record. Rather than walk away, as many others would have done, they saw this as an opportunity to do well while doing good
Financial diligence: The team was diligent in their financial management, creating and making needed system changes that would allow them to know their business, and its key drivers of success.
Open to learning: The Pedala team consistently showed itself to be a learning team. Not only did they listen and carefully take the advice from NESsT, but they also joined the transportation and mobility acceleration program of Conecta where they learned industry specific strategies and tactics.
Commitment to measuring impact: For Pedala, social impact did not stop at the hiring process. While in the portfolio, the enterprise measured both the quantitative and qualitative aspects of its work, ensuring that it was indeed providing a service that resulted in good jobs for vulnerable youth and less carbon emissions.
Pedala Co-Founders: Vinicius Justa (left), Alexandre Messina (middle); NESsT Brazil Director: Renata Truzzi (right)
In three years, Pedala was sought and bought by one of the largest e-commerce corporations in the region, B2W, at a time in history where e-commerce has become one of the fastest growing industries on earth. At the time of the purchase, Pedala was generating BRL 2.2 million in sales and providing employment to 175 at-risk youth.
By staying close to their numbers, getting their cost revenue structure right, providing a high quality service with social and environmental impact appreciated by its customer base, staying true to their employees and values, learning from what they were doing, and not being afraid to ask or to hear the hard questions, Pedala prepared itself for high growth and impact.
Interested in learning more about Pedala’s story?
Pedala Co-Founders: Vinicius Justa (left), Alexandre Messina (right)
NESsT’s investments in Pedala were made possible by the Trafigura Foundation’s financial and strategic support.
About NESsT:
NESsT invests in social enterprises that generate dignified jobs for people most in need.
The NESsT Incubation Program: Since 1997, the Incubation program has been accelerating early-stage social enterprises. The program provides tailored business assistance alongside flexible financing, mostly in the form of grants and recoverable grants, to assist social enterprises to become profitable. The NESsT team supports each company with technical assistance and mentoring to reach key milestones.
About Trafigura Foundation:
The Trafigura Foundation provides long-term funding and expertise to improve the socio-economic conditions of vulnerable communities around the world. We support non-governmental organisations and social enterprises in the development and implementation of programmes in the fields of Fair and Sustainable Employment and Clean and Safe Supply Chains. Another essential part of the Foundation’s mission is to help Trafigura employees organise and fund staff- led community-oriented activities.
To learn more, visit www.trafigurafoundation.org.