Can even run errands to withdraw money
文 | 令晨
图 | IC Photo
Rappi is the first investment target for Softbank to establish a new Latin American 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.
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The seed round has Andreessen Horowitz, the first investment in Latin America by a16z.
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In 2016, I joined Y Combinator and got the investment. The investors of Pre-A round are Andreessen Horowitz, Sequoia Capital, and DST Global.
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In September 2018, Rappi won a new round of $200 million in financing, with a valuation of more than $1 billion, making it the second unicorn in Latin America.
Starting
Rappi was founded in 2015 by Simón Borrero, Sebastian Mejia and Felipe Villamarin.
In the beginning, 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 bought 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, Domicilios.com and Uber Eats only provide room service.
Distribution on demand
Whatever beautyMission, or Southeast Asia’s Gojek, Grab, “super applications” business seems to be indispensable for on-demand delivery services.
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.
Because of 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 waits for a Rappi order in Bogota, Colombia
This also promotes the development of on-demand services, especially for two-wheeled vehicle delivery.
Rappi’s delivery vehicles are two-wheeled vehicles, which 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 reached 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.
Rappi Distribution for Scooters on St. Paul Street, Brazil
Universal errands application
Rappi has built a more complete ecosystem within the app.
The errand service can meet almost all the requirements of the user. Delivery of parcels and drugs is the most common service, and others are also available.Dogs, pick up children, or go to the mall to change the size of the shirt you just bought, you can also use Rappi to run the leg to withdraw money. Users with credit cards pay 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 deals came from restaurants and grocery stores, and the company had 20,000 couriers and worked with 50,000 retailers.
At present, 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 Finance
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 have a bank account, you can use the application’s QR code to pay for the transfer, to achieve the transfer transaction, including the spell between friends, can also be done with RappiPay .
After receiving $1 billion in investment from Softbank in April this year, Rappi promoted payment, 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 2In 013, former Sequoia Capital Partner David Vélez founded the digital bank Nubank in Brazil, and issued a virtual credit card, which can be applied for by mobile phone. In early 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, up 66% from 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 loan company Creditas and Mexico Payment Solutions Inc. raised more than US$100 million in financing, and Tencent invested in Uala, the Argentine digital bank card company.
Disputes
To date, Rappi continues to grow at a steady rate of at least 20% per month. The fast-growing Rappi was controversial and local regulators surveyed the company.
The 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 make sandwiches while waiting for Rappi orders
The Department of Labor has found a more serious problem: the working conditions of the shared industry have 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 this is a new economy,” and considering the “negative impact” of regulation would “block the company’s business.”
References:
UndErstanding Rappi, the Colombian Unicorn
LatAm 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