How Rappi Quickly Grew Into A Leading On-Demand Delivery Startup

By Dan Anderson ● Sep 4, 2018

Rappi is a Bogotá, Colombia based on-demand delivery company that recently raised $200 million in funding at a valuation of more than $1 billion. DST Global led the round and existing investors Andreessen Horowitz and Sequoia also participated in this round.

When Andreessen Horowitz invested in Rappi in July 2016, it was the venture capital firm’s first Latin American investment. With this new round of funding, Rappi will be able to better compete again Uber Eats. 

The only other “unicorn” startup in Latin America aside from Rappi is São Paulo-based Nubank. Nubank is a financial technology company that is considered a digital bank and provides credit card operations. DST is also an investor in Nubank. Another notable Latin American startup deal that happened recently was Didi Chuxing’s acquisition of Brazil-based 99 at a rumored value of about $1 billion back in January.

Rappi started off by delivering beverages and then quickly expanded to groceries, medicine, meals, and consumer electronics. Plus Rappi also supports cash withdrawals where users can pay with credit cards and receive cash from Rappi’s delivery employees. 

Rappi generates revenue by charging $1 per delivery (or $7 per month flat). And Rappi is able to keep delivery costs low by having couriers use bikes and motorcycles.

Simón Borrero, Sebastian Mejia, and Felipe Villamarin founded Rappi in 2015 and participated in the Y Combinator startup accelerator program the year after.

In a Bloomberg report in February, Rappi said that its regular customers average more than four orders per week. And some of the company’s couriers said the demand is keeping them better paid than minimum wage jobs.

“We’re going to be in every country in Latin America, including the smaller Central American ones,” said Borrero in the Bloomberg interview. Rappi has a goal of removing “the hurdle of logistics in Latin America, where things could take days to get delivered.”