NY Launch Pod: Welcome to the New York Launch Pod, the New York Press Club award-winning podcast highlighting the most interesting new startups, businesses, and openings in the New York City area. I’m your host and New York attorney, Hal Coopersmith and in this episode we speak to Tximista Lizarazu, founder of Fraîche. It’s only been a few months since we spoke to Tximista, but a lot has changed for Fraîche. Fraîche is an innovative vending machine, delivering fresh food to offices as companies return to the office and trying to attract talent. So learn more about Fraîche in another episode of How you doing?
NY Launch Pod: So remind people what is Fraîche?
Tximista Lizarazu: Sure. Basically we are building a better generation of cafeterias for offices. We have this smart fridge technology. We’re placing those smart fridges in offices. So employees have 24/7 access to good quality food.
NY Launch Pod: And you were with us in episode 88. We published it October of last year. It’s been more than a few months since you’ve been on, but not even a year. What’s happened to Fraîche in this period of time?
Tximista Lizarazu: I mean a lot of things. We continue to grow; actually, we multiplied our revenue by 10 in the last nine months total.
NY Launch Pod: You 10 x your revenue in nine months?
Tximista Lizarazu: Yeah, so that has been crazy and with the same team and only one sales rep. So we’re pretty happy about that. So we are actually now about to close an extension round to hire a few more sales rep and continue to grow basically.
NY Launch Pod: And 10 xing, your revenue doesn’t happen by accident. How did that happen?
Tximista Lizarazu: A lot of reasons, I think the market is finally ready for the product we have. Return to the office has been booming. You know, all the leaders need new perks to make the office a more exciting place. I think that’s one. Two, all those big cafeterias don’t really make sense anymore. They were built basically to have 100% of the people at the office and 70% penetration rate, I will say and this doesn’t make sense when you only have 50 to 60% of people at the office. So the way we are doing business makes more sense and the unit economics makes more sense because we can provide basically a cafeteria to any offices of more than 40, 50 people at the office, which is also way beyond market.
NY Launch Pod: So you said a couple of things which were pretty interesting to me. One, return to office is booming, but two, that occupancy is less and you’re certainly on the ground for both of those things. What is going on? Because you’re truly on the ground for these companies?
Tximista Lizarazu: Yeah, definitely. I mean, so we never retargeted tech companies because actually they were the last ones to go back to the office. So we are more, you know, working with contracting firms, financial services firms also we’re pretty big in the luxury world. We have four, five clients and we have a lot of conversations ongoing with big leaders in the luxury world. So I mean, the policies that we’re seeing are three to four days a week at the office, but everybody now, almost everybody, has a policy, which was not the case, I will say six, seven months ago when we had this conversation. But now there is a policy in place with all the companies, so it makes all life easier, I will say.
NY Launch Pod: And you’re saying that the old style cafeteria doesn’t work for the new way that companies are operating in a return to office way. Why are your unit economics more favorable than a traditional cafeteria?
Tximista Lizarazu: It’s super simple. There is no labor on site. So we’re just placing a smart fridge and we are refilling this smart fridge with fresh food every single day and the fresh food is coming from the coolest restaurants of the city. So we are only working with local brands, but basically, you know, we just need one delivery a day and then we have the technology with the mobile app and the smart fridge itself. So, no CapEx. So basically we’re profitable from day one because we’re financing those fridges. So every time we’re watching a location, those locations are profitable from day one.
NY Launch Pod: And I have a feeling I know what you’re going to say, but I’m going to ask this question anyway. In the face of the current economic environment, there have been a lot of job cuts. There have been a lot of economic headwinds. Why is this a worthwhile investment for companies? Because they’re saying, we have to belt tighten and now all of a sudden we’re investing in this smart fridge in a way that we never did before. This smart fridge is great, but I’d rather have my coworker.
Tximista Lizarazu: So there are few answers, like I will say three answers. The first one is that all the companies at the moment need a true job boost, I will say. If you fire 10% of your team, you want to make sure that the remaining 90% are staying and are retained and they are happy to come to the office. You still need to offer them perks and, and ways to be still excited about what you are as a company. Also, you know, so many people have been at home for the last three years and we have a lot of feedback that Fraîche basically is a culture boost and that even like people that are from the fourth floor are meeting people from the first floor for the first time because of Fraîche, and one of those main feedback and argument that we have is that Fraîche is a way to bring back people together and I think so many companies need that today because they lost a little bit of their culture in the last three years. So even though they’re in cutting mode, all the employees still need to eat and they usually have budget, for catering or a budget for the cafeteria that they are subsidizing, or at least they’re paying for the infrastructures, and even sometimes they have subsidy on, on the delivery platforms but what we are doing is way more sustainable. So we are offering them an alternative to delivery, for example, which is going to be one cheaper and two, way more convenient and sustainable.
NY Launch Pod: And how has Fraîche helped build culture? Because some people may say, you know what, here it is, I get it is a smart refrigerator, we’re giving our employees meals, but how are they able to bond over?
Tximista Lizarazu: I mean, the feedback that we have is that, Fraîche is like the new water cooler or the new coffee machine, in France, and people are meeting around the fridge and then sometimes even waiting in line, discussing and basically what we’re trying to sell is that instead of leaving the office and losing 20 minutes in line, it’s better to reinvest this time, being with your coworker and discussing with your coworker at the office. So that’s the value proposition but then we are also organizing small events. So basically every month, we have what we call the surprises and we have our brand ambassadors going to the office and bringing something different that is not in the fridge, on a regular basis too. So everybody comes at the same time around the fridge and there is some interaction and sometimes, little gifts and stuff like that. So we’re trying to really build some momentum and some events on top of what we are. It goes way beyond the fridge; it’s also about educating people about health and wellness, about sustainability. It’s about just telling the stories of all the food partners also that we have in the fridges. So we are doing all that stuff and then we are also now working on some software features, in our mobile app to connect people with like after work we have discounts. So the company will pay for those discounts, for example, and everybody will come around the fridge at the same time, and it will be a way to mingle and connect.
NY Launch Pod: And it all sounds wonderful. You talked about the app, the connectedness, the events and how you’re going to raise more funding. What do you think 2024 holds for Fraîche?
Tximista Lizarazu: I mean, 2024 is going to be, I think, very exciting. The beginning of this year has been tough for everyone with the kind of financial crisis and the impact of the world and all this stuff. Hopefully it’s going to be more exciting for everyone and the market conditions are going to be less tense, but for us it’s going to be a big growth phase. Hopefully we’ll raise our Series A by either end of the year or early next year when the market conditions also are better and from that the idea will be to go get the New York market, it is a huge, huge market for us. It’s basically any office of more than 50 people. So it’s going to be building a big sales team and structuring the sales team. We’ve better processes so we can go faster building some channel partnerships. Also, we’ve startups that are already in some of those offices, we’ve landlords, and we’ve potentially the big food services companies. We’re talking with some of them already and they’re interested in what we’re building. So I think it’s going to be exciting for us.
NY Launch Pod: Well, that is a wonderful note to end things on. Tximista Lizarazu, thank you for stepping back on to New York Launch Pod and sharing with us, plus how did people find out more about you and Fraîche?
Tximista Lizarazu: We’re pretty active on LinkedIn. It’s Fraîche on LinkedIn and the Fraîche has just gone on Instagram as well, if you want to check it out. We have a big foodie community, a lot of good food content. Exciting. If you are looking before your lunch.
NY Launch Pod: And if you want to learn more about the New York Launch Pod, you can follow us on social media @NYLaunchPod or visit nylaunchpod.com for transcripts of every episode. And if you’re a super fan of the show, Tximista, are you a super fan of the New York Launch pod?
Tximista Lizarazu: Of course.
NY Launch Pod: If you are a super fan like Tximista, please leave our review on Apple Podcasts. It is greatly appreciated and does help people discover the show.
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