From an on-demand delivery startup to the unicorn super app that offers virtually anything consumers might want, Colombian Rappi has been collecting a series of milestones during its business journey in Latin America.
The most prominent of them has an exact size: $1 billion. After announcing a $5 billion innovation fund for Latin American startups in March 2019, the Japanese giant SoftBank‘s first move with that venture was to assign a great deal of this amount to Rappi – a fifth, to be precise.
“Rappi founders have a bold vision to create the premier multi-service super-app for Latin America,” stated at the time the Executive Vice President and COO of the SoftBank Group, Marcelo Claure.
And Rappi has been, indeed, sparing no effort to be the top of mind super app in Latin Americans’ lives. Get to know the Colombian unicorn’s journey:
Rappi Colombia: How it all started
Headquartered in Bogotá, Rappi Colombia was born in in 2015, founded by Colombians Simón Borrero, Sebastian Mejía, and Felipe Villamarin. “We worked together creating software that transformed the way you buy your groceries online. We worked with the biggest brands all over the world and won several awards for the best interface for shopping groceries online,” says Rappi cofounders in an interview with one of its first investors, Y Combinator. “Nonetheless, every time we looked at user satisfaction, we saw that they loved the app and hated the logistics.”
“We then decided to start an experiment in which we leveraged on our UI mixed with crowdsourced last-mile logistics. It started in a small neighborhood with the inventory of a small mom n’ pop shop. The experiment never ended.”
Rappi Colombia had an ambitious purpose from the very beginning. Rappi delivery startup was born more than five years ago, with its sights set to become a super app. What began as a service focused on delivering beverages and meals, soon expanded into groceries, tech goods, medicine, banking, entertainment, travel, live streaming… and that list is increasingly expanding.
Rappi Colombia no longer belongs only to its hometown: Rappi is present in over 200 cities spread in 9 countries – Colombia, Brazil, Mexico, Argentina, Chile, Uruguay, Peru, Ecuador, and Costa Rica – reaching more than 7 million users in Latin America. In addition to its headquarters in Bogota, Rappi has main offices in São Paulo and Mexico City.
How much is Rappi worth? Rappi Softbank investment and more
Paving the way for such tremendous expansion, Rappi has a few backers on its side, and it has reached the mark of $1.7 billion in total funding over 9 rounds of investment, according to data from Crunchbase. Its latest investment was a $300 million Series F round led by the American investment firm T. Rowe Price in September 2020, which placed Rappi valuation at $3.5 billion.
But its most significant round, Rappi Softbank investment, was raised a bit earlier: a $1 billion Series E in March 2019 from the Japanese giant through its SoftBank Innovation Fund, exclusive for Latin American firms – something that put Rappi app and the region on the limelight. It was the biggest investment received by a Latin American startup to date and has been supporting Rappi app mission into scaling both geographically and in terms of its product portfolio.
Earlier, in 2018, Rappi managed to raise $200 million in a Series D round led by DST Global and $130 million in a Series C contribution headed by Delivery Hero.
In 2016, Rappi gathered over $62 million over 4 seed and early-stage rounds led by funds such as Sequoia Capital, Andreessen Horowitz, and Y Combinator. In 2015, Rappi raised its first pre-seed round: a $120,000 investment check from Mexican investment firm Investo.
What is Rappi food: Rappi Delivery verticals
It is been quite a while since the Colombian unicorn Rappi app expanded its portfolio to cover, beyond the last-mile deliveries of food and virtually any other product, an array of new services for its customer base.
After consolidating itself in the market for delivery of restaurants, pharmacies, and convenience items, the Rappi app started offering services such as manicures, domestic activities, massages, among others.
In 2020, Rappi also launched two new verticals: Rappi Entertainment, with features dedicated to music streaming, live events, and games, and Rappi Travel, for booking airline tickets, buses, and hotels, with the intention of adding car rentals, tours, and travel insurance.
“Rappi Entertainment goes beyond simple fun since it integrates all the other verticals within the super app, such as delivery and travel. Watching a live (video with) shopping (features) of their favorite brand allows users to buy products in real-time,” explained Sérgio Saraiva, president at Rappi Brasil, in an interview with LABS.
Since the launch of Rappi Entertainment back in July, Rappi has already hit the mark of more than 1 million users only in this vertical. The strategy? To make a strong bet on solutions that link community and social with e-commerce, in order to be ‘the’ market platform when people think about live shopping. All in all, Rappi wants users spending more and more time within the platform.
Rappi Mexico, Brazil, and other key markets
In January this year, Rappi announced the debut of its digital bank Rappi Bank in Brazil. Created to offer financial services to users and businesses, the first product launched in the new vertical was a working capital credit line aimed at the super app partners.
“The financial products we are starting to offer strengthen the partnership with our partners, especially in this difficult time that we are living in. We want to be an essential part of our partners’ lives and, in that sense, financial services are fundamental to achieve this goal,” said Sérgio Saraiva, president of Rappi Brasil. Previously, Rappi had already created Rappi Pay, for payments and commercial areas.
“This is the first financial product in a series that we are preparing for our users and partners,” revealed the president of Rappi Bank in Brazil, João Paulo Félix, highlighting how much Rappi is focusing on its financial services arm.
If Rappi already had the bold ambition of becoming the most complete app in the lives of Latin Americans, the consequences of the COVID-19 pandemic for consumption and shopping habits only leverage this goal.
“At the beginning of the pandemic, we hit a 300% increase in the number of orders, mainly for grocery, pharmacy, and restaurant sectors,” Saraiva revealed to LABS. This happened in two ways: users already used to ordering food started ordering pharmacy and supermarket products; and newcomers who, due to the pandemic, used the app for the first time. It was this recipe that, according to Saraiva, took supermarket verticals to another level in Rappi’s operation.
“We have already tripled the number of personal shoppers (partners responsible for picking the products asked by users), 85% of the grocers registered in the superapp are already available for delivery on the same day and 96% for the next day,” he added. “The goal is to work to get as close to 100% as possible.”
Sitting on the president’s chair of Rappi Brasil, Sérgio Saraiva leaves no doubt about the importance of the country for the super app. “The [latest] investment raised has a main goal: the expansion of Rappi’s operation in Brazil,” summarizes Saraiva. The contribution he mentioned is the $300 million Series F round led by the American investment firm T. Rowe Price in September 2020. In Brazil, Rappi competitors are mainly iFood and Uber Eats.
“The value is not being applied to just one front of interest. We want to be increasingly stronger in products and verticals, as well as being even more aligned with our users. The last round received adds in this sense, following the path of our consolidation as the biggest super app in Latin America.”
But such skyrocketing growth does not come without controversy, and “Rappi USA” are the keywords on this specific one. In January 2020, the Colombian super-app Rappi was sued in the U.S., accused by three Colombian entrepreneurs of “stealing market strategy” from another delivery app.
According to the entrepreneurs, the CEO of Rappi, Simon Borrero, was hired in 2015 by a software company called Imaginamos to develop a delivery application called Kuiky, which did not work. At the end of the same year, Borrero would have launched Rappi.
As for the other countries in Latin America, besides being a key player in the last mile delivery market of Brazil and Colombia, Rappi Mexico and Rappi Argentina are also operations making Rappi grow on its path of “consolidation as the biggest super app in Latin America,” as mentioned by Rappi Brasil president, Sérgio Saraiva.
Rappi Argentina celebrated in 2021 three years in the country and over 4 million people who have registered in the app, reported Infonegocios. The frequency of use of the Rappi app increased by 200%.
With over 15,000 partner businesses among the main supermarket chains in the country, restaurants, pharmacies and specialized stores, Rappi Argentina has over 20,000 registered couriers on its platform.
“At Rappi, we are committed to supporting the growth of the region through higher income for those who connect as distributors, greater customer opportunities for partner businesses, and the development of new technologies that empower the industry and its talents. We offer our users all the options to connect them with their needs “, stated Simón Borrero. The Argentine market has always been a priority for us, and in these three years, we have had a great reception from all our users,” concluded the executive about Rappi Argentina.
Rappi Mexico also stands out in the company’s strategy with a long list of launches since it started operating in the country. In 2019, Rappi made a partnership with Visa to release its own debit card in the country. In 2020, it was the financial group Banorte that crossed paths with Rappi Mexico: the two firms have struck a partnership to become co-owners of a digital financial services venture in the country. Rappi Mexico and Banorte’s goal was to form a broad digital financial ecosystem, which will coexist with digital mobility services and e-commerce.