In this photo illustration the delivery app AiQFome logo is displayed on a smartphone screen
Photo: Rafa Press/ Shutterstock

Acquired by Magazine Luiza, Brazilian delivery app AiQFome triples sales volume in 2020

The app has already over 2 million users. Investments from the retail giant Magalu and operational efficiency brought by another platform, eNotas, are helping it to scale business in 2021

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Embracing an ever-increasing range of products, delivery services in Brazil were already growing before the pandemic. But in 2021, they are gathering extra pace. Part of this new boom is being backed not only by increasing funding, but by a rise in mergers and acquisitions in the Latin American startup ecosystem. 

With an eye on expanding its business, Brazilian retail giant Magazine Luiza took a step in that direction in 2020: it acquired Paraná-based AiQFome. Over the past year, the delivery app from southern Brazil saw a threefold increase in sales compared to the previous year.

Even with the resumption of activities, although in the midst of a second wave of infections caused by the COVID-19 pandemic, the growth of these platforms approached a point of no return. They are already part of Brazilian consumers’ day to day life. Founded in 2007, AiQFome claims to be a pioneer, the first food delivery website in Brazil. Since then, it has exceeded the mark of two million users.

In an interview with LABS, Gustavo Rangel, AiQFome’s financial head, said that the company is currently in 427 cities and has national reach, as it operates in 21 states of the country. AiQFome transacts over BRL 700 million per year and it has been showing “exponential growth”, according to the executive, who does not reveal absolute figures.

Gustavo Rangel, financial head at AiQFome. Photo: Courtesy

READ ALSO: From a brick-and-mortar stores chain to the largest Brazilian retail ecosystem: Magazine Luiza’s next steps

But unlike its app counterparts, AiQFome has two different traits: a focus on small and medium-sized cities, with 15 thousand to 300 thousand people; and the licensing model. The startup is not in charge of directly delivering meals from the restaurant to the end-user but acts as a mediator between orders and payments. The delivery itself is in charge of restaurants and their couriers.

“AiQFome works as a company that licenses the software. Something like a franchise model”, explains Rangel. In this model, AiQFome sells the software license to anyone interested in taking the application to a specific city: whoever buys the application’s license is called a city manager. With an initial investment of BRL 15 thousand and a fee that can reach up to 12% on each order made by the end-user, city managers prospect restaurants to integrate the platform. AiQFome also monetizes at this point, with a fee on top of each order placed.

“Soon we will have [deliveries], to kick off this month or the next. But, in general, the company still does not have this functionality,” says Rangel.

AiQFome, which claims to be the third-largest delivery platform in the country, has around 17,000 partner restaurants and 110 employees. But now, integrated with Magalu superapp since September last year, these numbers tend to further speed up. Since the acquisition, AiQFome says it has seen a rise in demand for licensees across the country.

AiQFome, which claims to be the third-largest delivery platform in the country, has around 17,000 partner restaurants and 110 employees on the team. Integrated with Magazine Luiza’s (aka Magalu) superapp since September last year, this whole base tends to grow further. Since the acquisition, AiQFome says it has seen demand for licensees across the country increase. According to Rangel, the app has currently 271 licensees – or city managers – in the 427 cities where it operates.

READ ALSO: With Cornershop and Postmates, Uber expands food delivery further and sees ride demand pick up

According to information from Magalu, each AiQFome user places, on average, over three orders a month. It was precisely this recurring behavior of users from the Paraná-based startup that caught the eyes of Brazil’s retail giant. “In addition to expanding the services in our marketplace, the goal behind the acquisition is for AiQFome to increase the recurrence of our superapp,” said Roberto Bellissimo, CFO at Magazine Luiza.

“With the acquisition, we bring into the company skills that we do not yet have.” On app stores, AiQFome is rated as one of the best in the country in the delivery category. “The big secret here for us is the monthly basis of three times,” said Frederico Trajano, CEO at Magazine Luiza, during the release of the company’s financial results in November. “AiQFome was acquired a lot in that context, to integrate our superapp and increase our monthly shopping recurrence.”

Another shift that the acquisition by Magalu might bring to AiQFome, as mentioned by Rangel, are deliveries, which according to the company are in the testing phase in some cities such as Tietê, in São Paulo.

Although AiQFome has not added the service on its platform yet, advancing the logistics operation is one of Magalu’s bets with the acquisition. With AiQFome, the retailer expects to increase the potential of expanding two products in its portfolio: Magalu Payments and Magalu Deliveries, which will now be offered to the restaurants registered in the delivery app.

According to Bellissimo, the goal is also to expand investments in the business to serve larger cities, similar to what happened with other startups acquired by the retail giant, such as the logistics firm Logbee. At the time of the acquisition, in 2018, the startup operated only in São Paulo and accounted for 2% of Magalu’s deliveries in the city. Just over two years later, Logbee already makes up to 50% of the retailer’s deliveries in Brazil.

READ ALSO: Brazilian micromobility firm Tembici hits BRL 100 million in revenues and plans to enter the last-mile delivery market

Investment and operational efficiency backing the growth

If Magazine Luiza’s acquisition gave AiQFome a boost for business expansion, another platform that operates behind the scenes, eNotas, delivered operational efficiency to the app. 

Founded in 2011 for the automation of invoices, the company from Minas Gerais, in Brazil, implemented a system that enabled AiQFome to jump from 13 to more than 7 thousand invoices issued per day. Before implementation, invoices were manually issued. 

In more than 400 cities across Brazil, AiQFome’s operation represents precisely the gap eNotas has emerged to bridge, since the latter automates the entire invoice flow in any city. In Brazil, the issuance rules tend to change (a lot) from city hall to city hall.

Christophe Trevisani, CEO at eNotas. Photo: Courtesy

“We joke that the common point between the electronic invoice system in Rio de Janeiro and Niterói [city near Rio de Janeiro] is the bridge, because, apart from that, everything changes,” says CEO Christophe Trevisani, explaining that the company’s solution unifies the communication with all city halls. “With a single integration with one of our products, which is a high-scale invoice automation gateway, AiQFome is able to issue electronic service invoices in more than four hundred cities, without having to change anything in the integration or understand local variations.”

READ ALSO: Rappi, Loggi, and B2W Digital: What changed in e-commerce logistics in Brazil after COVID-19

With two solutions aimed at issuing and one at monitoring the invoices that the client companies have issued against themselves, eNotas has 54 thousand clients on the platform, including names such as Conta Azul, TOTVS, Cornershop – and even the Brazilian digital influencer Whinderson Nunes. In 2020, the company hit an overall growth of more than 105%, when it transacted BRL 118 billion in financial volume of invoices issued. In 2019, the volume transacted was BRL 4.7 billion, a twenty-five times jump.

The team, which started last year with 52 people, now has 107 employees and continues to expand, with about 30 open positions for the first half of the year, among areas such as data, commercial, legal, HR and software engineering. In 2021, eNotas expects to grow 80 to 90% over 2020’s revenue.