Super-applied expansion of Latin American unicorn Rappi: everything can run errands


Text | Morning Map | IC PhotoRappi is the first investment target after Softbank established the Latin American New Fund.In March of this year, Softbank launched a $5 billion new fund, the SoftBank Innovation Fund, to invest in technology companies in Latin America.At the end of April, Softbank invested Rappi for $1 billion.The official did not release data, according to local media speculation, Rappi’s valuation is $ 3.5 billion.This company, which started with on-demand services, has earned a lot of attention for Latin America’s venture capital.The seed round has Andreessen Horowitz’s participation in the investment, and is the first Latin American company to invest in a16z.In 2016, I joined Y Combinator and got the investment. The investors of Pre-A round are Andreessen Horowitz, Sequoia Capital, and DST Global.In September 2018, Rappi won a new round of 200 million US dollars financing, with a valuation of more than 1 billion US dollars, becoming the second unicorn in Latin America.Founded in 2015, Rappi was founded by Simón Borrero, Sebastian Mejia and Felipe Villamarin.Initially, the company provided users with a blank box on the application, which could fill in any items that they wanted to deliver, and the feedback was unexpected, such as at least one hundred requests for dog service.Starting with the distribution of wines and beverages from local stores, Rappi gradually added groceries, distributing food, medicines, buying groceries and food distribution to help Rappi stand out from the competition.Other similar companies have only a single service, like Mercadoni can only buy groceries, and Uber Eats only provide room service.On-demand delivery Whether it’s the US group, or Gojek, Grab in Southeast Asia, the “super apps” business seems to have an on-demand delivery service.The Latin American region lacks public transport infrastructure and traffic congestion is severe.In Colombia and Ecuador, traffic congestion has also become a problem in major cities.The local government has launched a “pico y placa” system to limit the owner’s driving time during peak hours.On the double-days of each month, vehicles with an even number of license plates cannot travel in restricted areas, while vehicles with a single number of singular numbers are restricted in the single-day sunrise.Due to the traffic congestion and the local organic car culture, in Latin America, bicycles and motorcycles have become efficient and efficient means of transportation.The courier waited for the Rappi order in Bogota, Colombia, which also facilitated the development of on-demand services, especially for two-wheeled vehicle delivery.Rappi’s delivery vehicles are two-wheeled vehicles that are delivered by motorbikes, bicycles or on foot to ensure that orders are delivered quickly.In addition to convenience, the use of two-wheeler distribution also reduces costs.The delivery fee for the Rappi order is approximately $1.In September 2018, Rappi entered into a partnership with Latin America’s leading shared bicycle and scooter startup Grin (later merged with Yellow, renamed Grow).According to the agreement, Rappi helped Grin expand in Latin America; at the same time, Rappi users can also rent Grin’s scooters on the app.The Rappi distributor of the scooter on the streets of São Paulo, Brazil, uses the Rapi to create a relatively complete ecosystem within the application.The errand service can meet almost all the requirements of the user.Delivering parcels and drugs is the most common service. Others include walking dogs, picking up children, or changing the size of the shirt you just bought to the mall. You can also use Rappi to run your legs to withdraw money.Users with credit cards pay for the amount they want to withdraw through Rappi’s app, and the courier will send the cash to them.In an interview with Bloomberg, co-founder and president Sebastian Mejia said that most of Rappi’s transactions came from restaurants and grocery stores, with 20,000 couriers and 50,000 retailers.Currently, Rappi operates in seven countries including Colombia, Mexico, Brazil, Argentina, Chile, Uruguay and Peru, with more than 13 million users.Not long ago, I entered Costa Rica and expanded my business to Central America.Bet Financial Latin America is one of the regions with the lowest bank coverage in the world.For the past 40 years, local financial groups have been controlled by large families in each country. Nearly half of adults do not have bank accounts, and only 41% have bank cards.In Colombia, 57% of e-commerce users use cash on delivery.This payment method helped Rappi achieve rapid growth in Colombia.Rappi saw opportunities in the financial sector.For Rappi, financial business is second only to logistics and distribution.Co-founder and President Sebastian Mejia told local media: “We are more than just a logistics company. Rappi has a great vision, including involvement in financial technology and banking.” In September 2018, Rappi launched the digital wallet RappiPay, users do not need to haveBank accounts can be paid using the application’s QR code scan to enable transfer transactions, including spelling between friends, or by RappiPay.After gaining $1 billion in investment in Softbank in April this year, Rappi promoted payments, e-banking and mobile wallet services in Latin America.In May, Rappi launched a mobile money transfer service.Its RappiPay allows users to transfer funds from their personal accounts to other users’ accounts in different banks using credit cards or digital wallet RappiCreditos credits.This service is easy to use, eliminating the cost of inter-bank transfers, no fees, and a lot of downloads.It’s not just Rappi that sees opportunities in Latin America’s financial sector.As early as 2013, former Sequoia Capital Partner David Vélez founded the digital bank Nubank in Brazil, issuing a virtual credit card that can be applied for by mobile phone.At the beginning of 2018, Nubank received $150 million from DST Gobal in the E round of financing, and was promoted to a unicorn.In fact, financial technology still has room in Latin America.As of 2018, there were 1,166 Fintech startups in Latin America, an increase of 66% over the previous year.Fintech accounts for 25% of all financing projects in the year and is the largest industry.In the first half of this year, Brazilian online lending company Creditas and Mexican payment solutions company Clip raised more than US$100 million. Tencent invested in Uala, the Argentine digital bank card company.Controversy So far, Rappi is still growing at a steady rate of at least 20% per month.The fast-growing Rappi was controversial and local regulators surveyed the company.Trade and Industry Superintendency ruled that Rappi’s business is “not responsible”.According to the investigation, Rappi did not open a receipt, did not provide a refund service, and did not display the specific price.No price details will obscure the extra cost, confuse the order, and sometimes charge the cancelled order twice, without charge to the bank card.Venezuela couriers wait for Rappi orders to make a sandwich. The Department of Labor found a more serious problem: the working conditions of the shared industry avoided all employment and liability regulations.Rappi employees told local media that Rappi does not pay for health insurance and pensions for “partners”, nor does it pay insurance for employees who are injured at work, and does not offer paid holidays.Rappi’s policy director expressed respect for the authorities, “but they must consider that this is a new economy”, and considering the “negative impact” of regulation “will hinder the company’s business”.References: Understanding Rappi, the Colombian UnicornLatAm delivery app Rappi plans to double footprint by year-end What’s Wrong With Rappi, Latin America’s Star Of Uberization Why Delivery Apps From UberEats To Rappi Are Taking Over Latin America.