Rappi reaches 100,000 deliverymen in seven Latin American countries

Following the path of recognized startups such as MercadoLibre in Argentina or NuBank in Brazil, the Colombian platform Rappi, commanded by Simón Borrero, has consolidated itself as one of the most important focal points for investors seeking business in the region.

Colombia's unicorn collaborative economic model already works in six foreign markets: Argentina, Brazil, Chile, Mexico, Peru and Uruguay.
Colombia's unicorn collaborative economic model already works in six foreign markets: Argentina, Brazil, Chile, Mexico, Peru and Uruguay.

Of these, some 20,000 would be established in Colombia, while the remaining 80% would be part of Rappi's operation in the other countries in which it operates.

Rappi operates in seven markets: Argentina, Brazil, Chile, Colombia, Mexico, Peru, and Uruguay, as well as Ecuador, where it is still working on the entry of the home delivery platform.

The platform does not provide disaggregated figures on the number of Rappi deliverers registered in each of these countries. However, several media outlets have published estimates of the number of distributors operating in these markets. 

According to information from the technology portal FayerWayer, Chile would be one of the nations where Rappi would present the highest figure, bearing in mind that by the end of its first year of operation, in June of this year, Rappi's general manager in that country assured that there would be more than 40,000 people who downloaded the application as deliverymen. Among these, those that would be active would be between 10,000 and 15,000 households.

In addition to this country, the business newspaper El Observador, from Uruguay, estimated that there would be between 8,000 and 8,500 distributors in that country who have used the platform to receive income. As for the Mexican market, Forbes announced last year that 9,500 people were working in that country using Rappi.

Argentina is the other territory where the number of Rappi deliverymen has been estimated. Last year it was estimated that there were 13,000 people operating as delivery people in that country.

There are no official or recorded media data in the markets of Peru and Brazil (the country that has opened more cities). There is no estimate in Ecuador either because the operation is just opening.

In the middle of this scenario (counting the lack of data from two markets) and in the four years that the Colombian startup has been in operation, approximately US$220 million would have been moved between users and distributors.

Despite having reached the six digits in distributors that have used the application, there are several mismatches that startup has seen with this part of the business. The controversy in this aspect has centered on whether or not the platform should guarantee certain types of benefits to the distributors that use it.

"It's not a Colombian problem, it's a global problem. We are all trying to understand how the Internet can be used, among other things, for regulation," said Stefano Farne, director of the Labor Observatory of the Universidad Externado, exemplifying that days after the Minister of Labor in Colombia, Alicia Arango, said that the deliverymen are independent of the platform, in Spain the opposite decision was taken with Deliveroo.

Faced with this, Rozo, who managed to lead the ICT portfolio, explained that the function of the platform is only to connect three parts: the first is understood by the shops where the products come from, restaurants, supermarkets, and other services, the second are the users who need something to reach a certain destination and the third are the deliverers, who fulfill this function.

"In the case of the deliverers, it is a platform that gives the opportunity to generate complementary income how and when they want. There is an offer and a demand that does not depend on the application," Rozo added.

Rapid expansion

Of the territories explored, not counting the opening of Ecuador, Peru was the last to materialize. To achieve this market, the platform worked hand in hand with Diloo, after making an investment of US$10 million, so that at that time the income was with more than 150 restaurants.

"We are in the process of starting operation in Ecuador and there are plans to continue this expansion that cannot be mentioned due to commercial issues. Rappi's growth has been a part of the DNA of this venture and we have made significant growth in the almost four years that the application has been operating," Rozo added.

This power of expansion is one of the facts that other entrepreneurs highlight most about Rappi, but not the only one. Entrepreneur Nicolas Fernandez said days ago that the Colombian application demonstrated the power of execution and growth, which were combined in the function of a long-term vision of mergers under a single brand.

Precisely in terms of versatility, the application has been expanding its portfolio, allowing, at the time, use the platform to get a tax return, in addition to its alliance with the skateboard platform Grin, after entering the country or the generation of services such as "rappi favors" or "rappi pay", among others.

However, a recent obstacle appeared to this growth and was the decision in Argentina to prohibit the operation of this type of services in that territory. Faced with this, the Colombian startup indicated that it will study and appeal the decision in the coming days. "We will continue to look after the interests of all parties, with the same commitment as always," the company said last week when the decision became known.

These were the company's numbers last year

One of Rappi's constant features is that it keeps growing its income and wealth, but also its losses. By the end of last year, the Colombian startup reported a total of $77.227 million in revenue and nearly $49.532 in equity. However, the figure for losses at the end of 2018 was $156,014 million. According to experts, the reason for this constant red figure in Rappi's earnings has to do with the investment the company makes to continue its expansion in the region.

Source: La Republica

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SOFTBANK INVESTS 1 BILLION DOLLARS IN RAPPI

The Japanese group SoftBank made its first movement in the entrepreneurial ecosystem of Latin America. The credit institution invested 1 billion dollars in the Colombian application of Rappi deliveries, which represents one of the largest venture capital investments in a technology company in the region, whose start-ups received capital for 2 billion dollars during 2018.

Rappi, which last September was considered the first unicorn of Colombia with a value of more than 1 billion dollars, will use the resources to accelerate its growth in the Latin American markets where it already participates, as well as to generate new products and services, reported the start-up in a statement.

Simón Borrero, co-founder, and CEO of Rappi said the investment is the result of the hard work of the entire team of the company and highlighted the support of the Japanese bank to improve the quality of life of Latin Americans with innovative products.

"We will continue to focus on creating innovations for restaurants, retailers and new start-ups so that they become new sources of growth," added Sebastian Mejía, co-founder and president of Rappi. The entrepreneurs did not disclose the participation that SoftBank will have.

Last March, the Japanese group announced the creation of an innovation fund for 5 billion dollars to invest in technology companies in Latin America. The bank divided the investment in Rappi into equal parts between SoftBank Group (SBG) and the SoftBank Vision Fund, later transferring the transaction to the newly created vehicle. Jeffrey Housenbold, managing partner of SoftBank Investment Advisers, will join Rappi's board of directors.

The start-up was created in 2015 and operates in 35 cities in Colombia, Mexico, Peru, Argentina, Chile, Uruguay, and Brazil. The application uses an army of delivery drivers on bicycles to deliver orders. In 2018, Rappi multiplied the number of delivered products by seven and recorded a monthly growth of 20% in the seven countries where it operates.

Among its investors are DST Global, Delivery Hero, Sequoia Capital, Andreessen Horowitz, and Y Combinator, where it was accelerated in 2016.

By Agencies