Why Buen Provecho Refused Investment from Grocery Chains (And How It Saved Their Business)

When major supermarket chains offer investment and immediate access to dozens of stores, most startups would jump at the opportunity. For Buen Provecho, a food waste marketplace operating across Latin America, those offers represented an existential threat disguised as a shortcut to scale.

On the Levels Podcast, Guillermo Martinez, COO and co-founder of Buen Provecho, explained why they turned down strategic investment from the very partners they needed most—and how that decision protected their ability to become the dominant platform in their market.

The Tempting Offer

After building their marketplace through grassroots validation and navigating the challenges of supply-constrained growth, Buen Provecho caught the attention of major supermarket chains. The pitch was straightforward: take investment, get instant access to their store network, and accelerate growth dramatically.

For a startup struggling to onboard stores one by one, the appeal was obvious. Sign one deal, gain dozens of locations overnight. The investment would provide capital to scale user acquisition, and the stores would provide the supply to support that growth.

"I mean, yeah, it's actually very interesting that you mentioned it. We did have some stores that were interested in doing those things. Thankfully, we're starting with some big supermarkets here, mainly just, you know, the old tradition, just being there, doing the same thing, insisting."

But as Guillermo and his co-founders analyzed the offer more carefully, they realized what they'd be giving up.

The Hidden Cost of Strategic Investment

The problem with accepting investment from a major supermarket chain goes beyond typical concerns about losing control or misaligned incentives. In a marketplace business, choosing one supplier as a strategic partner means choosing which side of the market you serve.

Guillermo laid out the fundamental issue: "If I go to one supermarket chain and do that, the rest won't work with me."

Supermarket chains compete intensely with each other. In Uruguay and Argentina, where Buen Provecho operates, a handful of major chains control most of the market. If Buen Provecho became partially owned by one chain, why would competitors trust them with their data and operations?

The data concern is particularly acute: "I'm going to be giving my data of how efficient I am, what I sell, what percentages of what things I sell to my competitors. They don't want to do that."

Every transaction through the Buen Provecho platform reveals valuable competitive intelligence about consumer behavior, product preferences, pricing elasticity, and waste patterns. No supermarket wants to hand that information to their rivals.

The Switzerland Strategy

What Buen Provecho needed wasn't a strategic partner—it was to become the neutral infrastructure that all chains could use. Think of payment processors or delivery logistics companies. They succeed precisely because they don't favor any particular retailer.

This neutral position is more valuable in the long run, even if it's harder to build. Instead of having guaranteed access to one chain's stores, they could eventually work with all chains. Instead of being limited by one partner's geographic footprint, they could expand wherever demand existed.

"So I mean, in one sense of, know, one aspect is okay, I can just grow my business, you know, maybe pre-ex in like a short time span. But what I'm going to do later, it's like, I'm actually leaving the door open for somebody to come in and just take the rest of the supermarkets."

That last point captures the competitive dynamics perfectly. If Buen Provecho accepted investment from Chain A, they'd create a massive opportunity for a competitor to launch and immediately sign Chain B, Chain C, and Chain D by positioning themselves as the independent alternative.

The Long Game Pays Off

The decision to refuse strategic investment meant taking the harder path. Instead of instant access to dozens of stores, they had to continue the grind of individual store outreach and relationship building.

"We had a really long conversation about this aspect and this is what we decided to do."

That conversation likely involved difficult projections about runway, growth rates, and competitive timing. How long could they afford to build slowly? Would a competitor emerge and take the strategic investment route? Could they reach critical mass before running out of resources?

But the patience paid off. By remaining independent, they've begun securing relationships with multiple supermarket chains. Each chain sees them as a neutral partner rather than a competitor's tool. The data they generate benefits the individual chain without leaking to rivals.

Lessons for Marketplace Builders

Buen Provecho's experience offers crucial insights for any founder building a marketplace or platform business where strategic investment from suppliers seems attractive.

Strategic investment creates strategic constraints. The capital and access feel valuable in the moment, but you're essentially choosing a side in an existing competitive landscape. That choice has long-term consequences that are hard to reverse.

Neutrality is a competitive advantage. Being the Switzerland of your industry—the platform everyone can use without fear of helping competitors—can be more valuable than being deeply integrated with one major player.

Data sharing is a bigger deal than you think. Even if strategic investors promise not to access competitive intelligence, the mere perception that they might is enough to scare off their competitors. In marketplaces, perception matters as much as reality.

Patience pays when building infrastructure. Buen Provecho's eventual goal is to become the infrastructure for food waste reduction across Latin America. Infrastructure companies need to be neutral, trustworthy, and independent. You can't become infrastructure if you're owned by one of the players who should be using that infrastructure.

The counterargument, of course, is that moving slowly creates risk. A competitor could raise more capital, accept strategic investment, and race ahead with one major chain's backing. That competitor might achieve market dominance before the neutral player can gain traction.

Guillermo acknowledged this risk but felt the long-term position was worth protecting. In their market, where several major chains have comparable footprints, being locked to one chain would cap their potential more than the speed boost would help.

When Strategic Investment Makes Sense

It's worth noting that Buen Provecho's situation isn't universal. Strategic investment from suppliers can absolutely make sense in certain contexts.

When there's a dominant player that controls 60%+ of the market, partnering with them might be the only path to scale. The remaining competitors are too small to matter, so neutrality is less valuable.

When the market is fragmented with thousands of small suppliers rather than a few large ones, strategic investment from one player doesn't lock you out of much opportunity.

When you're building a product, not a platform. If you're creating something for internal use by your strategic investor, rather than marketplace infrastructure, the neutrality concern disappears.

But for Buen Provecho, operating in a concentrated market where they needed to become neutral infrastructure, refusing strategic investment was the right call—even if it meant years of harder grinding to achieve the same scale.

The Current State

Today, Buen Provecho continues executing their independent strategy. They're working with multiple supermarket chains, maintaining their neutral position, and expanding across Latin America. The hard-won neutrality allows them to expand to new markets like Argentina without worrying about stepping on a strategic investor's toes.

They're also exploring new frontiers, working with industrial distributors and food producers who face the same waste challenges at different parts of the supply chain. None of these expansions would be possible if they'd accepted investment that locked them to retail-only partners.

The decision to refuse strategic investment didn't make their path easier. But it kept their options open and protected their ability to become the neutral platform their market needs.

Key Takeaways

• Strategic investment from suppliers creates strategic constraints that limit your ability to work with their competitors
• Neutrality is valuable in concentrated markets where multiple large players exist and compete intensely
• Data sharing concerns are real even if contracts promise protection—competitors won't trust a platform partially owned by their rivals
• Moving slowly can protect long-term positioning if the alternative is getting locked into one strategic relationship
• Infrastructure businesses need independence to serve all market participants equally

Listen to the full conversation with Guillermo Martinez on the Levels Podcast to hear more about the strategic decisions behind building Buen Provecho across Latin America.