Driven by the pandemic of COVID-19, which changed millions of Brazilians’ consumption habits, iFood Brazil stimulated the entry of thousands of restaurants, pubs, and supermarkets into the delivery market. It consolidated itself as the largest Latin America’s food delivery platform in 2020, being the preferred app by 60% of users, according to a survey by the QualiBest Institute.
With an average 130% year-over-year growth and a market value of way over $1 billion, iFood Brazil is present in more than 1,000 cities across the country and reached the mark of 48 million orders delivered per month in December 2020, thanks to a network formed by more than 236,000 partner restaurants and more than 150,000 active couriers on the platform and 250,000 in the restaurants.
Although the core of its business is the delivery of meals, iFood Brazil went from being a delivery company to becoming a technology company focused on food – a food tech. In the past two years, iFood Brazil has invested heavily in payments, logistics, and artificial intelligence products and services to become more efficient for all its customers, including end consumers, delivery partners, and restaurants.
The exponential growth of iFood Brazil and its bet on a diversified portfolio illustrate the potential of the Brazilian consumer market. International expansion is also on the company’s radar; iFood Colombia, the arm of the food tech that operates in Brazil’s neighboring country, it’s only one step in this direction.
From the analog world to food technology: iFood’s trajectory
Created in 2011, iFood Brazil is a spin-off of another much more analog food delivery service. Let’s say: Disk Cook, a printed guide of menus integrated with a telephone exchange through which consumers chose their meal and ordered over the phone. The ace in the hole was to migrate the service to the internet.
When it debuted in digital, iFood Brazil received about 12,000 orders per month. Just a year later, the delivery platform launched its website and application, which boosted orders to an average of 73,000 per month.
But the turning point came in 2013, when iFood Brazil received an investment of BRL 5 million from Movile. In 2014, the first merger took place, with Restaurant Web, of the JustEAT group, one of the largest food delivery companies in the world. In 2016, iFood Brazil aimed at increasing deliveries and acquired the Silicon Valley startup SpoonRocket and, in 2018, focusing on consolidating the logistics model, merged with Rapiddo.
2018 was also the year in which iFood Brazil raised a funding of $ 500 million in a round led by Movile, Naspers, and Innova Capital, raising the platform to unicorn status.
All of these strategic moves, in addition to investments in artificial intelligence to improve the user experience, led iFood Brazil to reach an average of 20 million monthly orders in 2019.
And then, the COVID-19 pandemic came and what could have been a year of losses, turned out to be a year of more opportunities for iFood Brazil, which recorded a record number of orders and increased its base of partner restaurants by 32%.
For delivery and beyond: foodtech solutions
In addition to the exponential growth in its operations, the pandemic year of 2020 was also the year in which iFood Brazil most bet on diversifying its portfolio with solutions beyond the food delivery service.
The most recent bet was the free digital account for all partner restaurants, launched in November last year. The digital account was developed by Movile Pay, in partnership with Zoop, both Movile Group fintechs, and is an evolution of the Visa prepaid card project, launched by iFood Brazil and Movile partner companies in August.
The account enables that iFood’s partner restaurants to access financial services that range from banking transactions (transfers, payments, and cards) and credit transactions (including prepayment of receivables by iFood) to acquiring services (POS offers and payment via QR Code).
In addition, iFood Brazil also started offering meal vouchers to companies; more than 600 companies use the service. The solution allows employees of the participating companies to use the meal voucher for purchases through the app or even in the physical restaurant, as a digital wallet and without charging an extra fee.
Also, in 2020, iFood Brazil acquired SiteMercado, which makes online sales intermediation for supermarkets and smaller grocery stores, expanding its bet in a sector that has skyrocketed in recent months with the isolation measures to contain the COVID-19 pandemic.
The acquisition of 100% of the business, for an undisclosed amount, reinforces the intention of the largest platform for ordering meals in Brazil to diversify and expand revenues in a sector in which it debuted in the 2019 iFood Mercado division currently with 2,100 sellers.
iFood Colombia debuted last April, through a partnership with Delivery Hero, one of the main global food delivery marketplaces. Together, iFood Colombia and Domicilios.com, Delivery Hero’s subsidiary in the country, took over an operation involving 12,000 restaurants in 30 cities.
Before iFood Colombia, there was iFood Mexico. The Mexican market was the first step of iFood Brazil towards the internationalization of its operations. In 2016, with the Brazilian delivery market’s leadership, iFood Brazil acquired 49% of the Mexican company SinDelantal, one of the most relevant companies in the country’s delivery market, for around BRL 100 million.
At the time, Carlos Moisés, CEO of iFood, said that Mexico was chosen to start the company’s internationalization due to the strong consumer market and the strength of the local economy.
However, in November 2020, SinDelantal announced the closure of its operations in the country. In a statement, iFood said the closure is part of the strategy to focus on markets in which iFood has a predominant role, such as Brazil and Colombia. The note also mentioned the intense competition in the food delivery sector in Mexico, intensified by companies such as Uber Eats and Rappi.