Elenas: The Quest to Become LatAm’s Social Commerce Leader

The Colombian company grew 70x over the past two years by giving low-income women a way to augment their income.  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

Hey friends,

Almost exactly a year ago, I stumbled across a TechCrunch article that caught my attention. The piece highlighted a social commerce startup based in Colombia called Elenas. Having spent a few months working with startups in Bogotá I was intrigued. As I read further, I became increasingly impressed by the company’s clever business model, obvious traction, and radical social impact.

I liked what Elenas was doing so much, I mentioned it as a company to watch in one of The Generalist’s emails around that time…though I botched the name 🤦‍♂️.

Fast forward twelve months, and Elenas is on a tear. Leveraging a similar approach to social commerce giants like Pinduoduo and Meesho, the company has amassed a large seller base and skyrocketed in scale. Just one example of that is how rapidly Elenas’ GMV has increased: 7,000% in two years. At the same time, it’s having a profound impact on the customers it serves, giving tens of thousands of low-to-middle income women new ways to increase their earnings.

If you want to understand how Elenas works, what it means for the online commerce market, and why I believe it's (doubly) worth paying attention to, jump into the piece below.

This piece was written as part of The Generalist's partner program. You can read about the ethical guidelines I adhere to in the link above. I always note partnerships transparently, only share my genuine opinion, and commit to working with companies I consider exceptional. Elenas is one of them.


ELENAS: THE QUEST TO BECOME LATAM'S SOCIAL COMMERCE LEADER

Actionable insights

If you only have a couple of minutes to spare, here's what investors, operators, and founders should know about Elenas.

  • Latin America is made for social commerce. The region has a GDP almost 2x that of India, with a GDP per capita closer to China's. Internet and social media usage are high, while e-commerce is low. These dynamics favor businesses like Elenas.
  • Social commerce companies benefit from low CAC. Because social commerce companies leverage existing connections, they're able to acquire end customers at a fraction of the cost of a traditional e-commerce player. That’s particularly true when it comes to acquiring customers in rural, low-income environments. Elenas' acquisition is particularly impressive with this group, boasting a CAC of $1.
  • Capital constraints can foster efficient growth. Though Latin America has become a hotter market for startup funding, this has not always been the case. The benefit of low capital availability is that it can breed efficiency. Elenas has succeeded in reaching tens of millions in profitable GMV, having raised less than $9 million.
  • Social commerce and fintech are a good match. Since Elenas already handles payments on behalf of its customers, it's in a good position to manage other financial interactions. We may see the company handle payments, loans, and other services.

***

It took Pinduoduo less than two years to become a unicorn. Despite entering China's e-commerce market late, long after Alibaba and Tencent had built their empires, it took "PDD" just 21 months to reach a valuation of $1.5 billion. A little more than a year later, PDD went public, boasting 300 million active buyers and 1 million merchants. Today, the business is valued at $61 billion and is one of the sector's dominant players.

Success of this magnitude is not easily distilled, and yet, great businesses tend to have a revelation at their center. If Pinduoduo's rise can be explained by a fundamental insight, it is this: shopping is social.

Intuitively, we know this to be true. Societies ancient and modern have organized themselves around centers of commerce; bazaars, markets, and malls act not only as a loci of transaction but also of connection. E-commerce's early movers mostly neglected this reality. When you navigate to Amazon or Flipkart or Alibaba, there is no sense of personal contact – only an endless, faceless aisle to be perused. Pinduoduo recognized this absence and reversed it. In doing so, the Chinese business became the face of a new kind of online buying: social commerce.

Rather than abstracting human relationships, social commerce businesses lean into them. For Pinduoduo, that meant incentivizing customers to get their friends to join them in making a purchase – by turning a single order into a bulk one, customers unlock discounts. Meesho, an Indian business, takes a different approach. The platform provides infrastructure for individuals to sell existing products directly to their friends. In this construction, the seller uses extant social connections to build a book of business. It has worked extraordinarily well, with Meesho raising at a $8 billion valuation.

While Pinduoduo and Meesho have fundamentally altered the complexion of their national markets and established dominant positions, many other promising geographies appear untapped. Indeed, the Global System for Mobile Communications Association (GSMA) estimated the total social commerce opportunity today to be worth $700 billion.

Latin America seems particularly promising. The region boasts a massive addressable market, relative linguistic homogeneity, high GDP per capita, widespread internet usage, low e-commerce penetration, and long-standing cultural preferences for direct buying. In short, it looks designed for a Pinduoduo or Meesho-esque disruptor.

After studying the business for several months, I believe that Elenas has the ability to become Latin America's social commerce giant. Leveraging a playbook similar to Meesho's, the company has reached annualized gross merchandise volume (GMV) in the tens of millions of dollars, growing more than 70x over the past two years. It has done so with limited venture funding and is now unit economic profitable. Mind-bogglingly, the company is run by a twenty-four-year-old CEO with close to a decade of experience. One tenured advisor referred to him as the most natural leader they'd ever met. If the best startups tend to be outliers, Elenas sits at the far edges of the bell curve by several different measures.

Elenas’ legacy may not be defined by any of these attributes. What makes the business most special is the impact it is having on the lives of low-to-middle income women on the continent. By aggregating access to products, software, and logistics they have allowed those with little money to become full-fledged entrepreneurs. So far, Elenas has served more than 100,000 of these “sellers,” enabling true economic empowerment.

In today's piece, we'll explore what makes this business so powerful, covering:

  • The paradoxical path of Zach Oschin. At an age when most of us are stressing about our SATs, Elenas' CEO was building businesses and holding down a full-time job. His early start has allowed him to develop managerial abilities beyond his years.
  • Latin America's social commerce cocktail. It would be difficult to design a better environment for a company like Elenas. Demographic information, buying patterns, and competitive dynamics open the door for a well-run insurgent.
  • Elenas' opinionated product. Oschin and his team have thoughtfully decided which parts of the buying process they want to own and which are better outsourced. The result is a product that knows what it wants to do.
  • Growing with speed and control. Elenas has announced just $8.5 million in funding but succeeded in processing significant volume and onboarding more than 100,000 sellers. This is a company that has shown it can allocate capital efficiently.
  • A culture of obsession. Even on weekends, Elenas' employees regularly meet with customers. Such behavior is indicative of a business that takes its user needs seriously and wants to go the extra mile.
  • Fintech forks. Elenas is an essential part of its sellers' lives, acting as a business operating system. In the coming years, we can expect it to expand into fintech, potentially managing payments, lending, insurance, and beyond.

Empecemos.

Wishing everyone a lovely Wednesday and a great rest of the week.

Until next time,

Mario

Older messages

AngelList: A Venture Constellation

Sunday, March 6, 2022

Naval Ravikant's company is both a unicorn and a creator of unicorns. It may just be getting started. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

Clair: Rewiring How America Gets Paid

Wednesday, February 16, 2022

The fast-growing fintech is building America's fairest financial institution. In the process, it's disrupting the noxious payday loans industry. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

Coatue: An Agile Colossus

Sunday, February 13, 2022

Coatue's performance has been built around strong in-house research and astute data analysis. Its greatest weakness may be its own culture. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

The Future of Solo Capitalists

Sunday, February 6, 2022

Individual general partners now manage more than many multi-person venture funds. What are the limits of a one-man band? ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

The Philosophical Foxes auction starts at 5pm ET! Start browsing the collection now.

Thursday, February 3, 2022

Join the Philosophical Foxes journey to explore on-chain storytelling and the frontiers of IP. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

You Might Also Like

Inside Grindr's plan to squeeze its users

Friday, March 29, 2024

The company's bet on AI boyfriends and other paywalled features is making some employees nervous Platformer Platformer Inside Grindr's plan to squeeze its users By Zoë Schiffer • 28 Mar 2024

Inside Grindr's plan to squeeze its users

Friday, March 29, 2024

The company's bet on AI boyfriends and other paywalled features is making some employees nervous Platformer Platformer Inside Grindr's plan to squeeze its users By Zoë Schiffer • 28 Mar 2024

SaaSHub Weekly - Mar 28

Thursday, March 28, 2024

SaaSHub Weekly - Mar 28 Featured and useful products Loach logo Loach Say goodbye to unachieved OKRs with Loach, an OKR management solution that empowers your team to seamlessly align their daily work

84 new Shopify apps for you 🌟

Thursday, March 28, 2024

New Shopify apps hand-picked for you 🙌 Week 12 Mar 18, 2024 - Mar 25, 2024 New Shopify apps hand-picked for you 🙌 What's New at Shopify? 🌱 New login requirements for the Order Status Page Changed ⸱

We've Been Tinkering

Thursday, March 28, 2024

Join Our Beta! ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏

AMA with Chiedo John, Director of Growth @ GitHub

Thursday, March 28, 2024

Live on Wednesday, April 3rd, starting at 9 AM PST͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌

red hot startup intel

Thursday, March 28, 2024

FULL SWOT analysis on Ramp, Databricks, Cohere, Devoted Health, and Coalition inside Scouting Reports on 🔥 Startups Download Now Hi there, Psst. Want competitive intel on the top 5 industry leading

The Ultimate Amazon Guide: Strategies For Sellers In 2024

Thursday, March 28, 2024

Learn from Melisa Vong for FREE in the Start Your Ecommerce Business Summit ! Another day, another exciting opportunity to introduce you to one of our 20+ ecomm trailblazers in the Start Your Ecommerce

[SaaS Club] Overcoming Early Struggles to Bootstrap to $22M ARR

Thursday, March 28, 2024

Hey Reader Let's connect on LinkedIn! Follow me to stay in touch! Here's a quick round up of what's been going on at SaaS Club: 🎧 Podcast Hubstaff: Overcoming Early Struggles to Bootstrap

The ultimate 9-5 escape plan

Thursday, March 28, 2024

This is from THIS episode - Spotify - iTunes Reid Hoffman (founder of LinkedIn) once said “Entrepreneurship is like jumping off a cliff and building a parachute as you go down.” 😅🪂 I don't know