I've used Rappi here in Mexico and it's probably one of the worst delivery services I've used. Just seems like they overextended themselves by going in multiple directions without being quite efficient at them. Their website also often shows promotions that suddenly disappear when you try to click on the specific restaurant and you then have to plead your case to the customer support representative. Overall not a very good experience. Their delivery people often make mistakes with items too.
Postmates and Uber Eats are here too. Can't really see why people would use Rappi. You also have a service called Cornershop for groceries so Rappi's competition here doesn't make it appealing.
Cornershop is groceries delivery made right. The person who picked your items is the same who delivers it to you, there's no dilution of responsibility. Wrong product? missing items? bread crushed under the milk? They will own up to it and fix it.
Previously we used HEB's own delivery service. One person picks your items, other packs them and yet another delivers it. When something is wrong no one owns up to it.
In Colombia, A LOT of the guys who work delivering in rappi are Venezuelan people with no documents, they ride mostly bikes with no helmets or protections at all ! And they are not social covered at all: no health or professional risks, no vacations, etc etc etc ... That's the worst way to do business, taking into consideration we are working hard (on Latin America) on formalizing our employees.
Same in Santiago (Chile). Even if the pop is more or less 5 million. We have PedidosYa, UberEats, Rappi, instadelivery, Glovo, menuexpress and other local options.
I'm always a little suspicious of the reality of unicorns.
The way that the figure is derived is that people paid $X for portion Y of the company, and therefore the company is worth $X/Y. The problem is that in addition to portion Y, in a large deal the investors also get preferred stock, downside protections, and so on. Those extras are worth something, and therefore some of $Y is for THAT rather than a share in the company.
Therefore the company is always worth less than the figure you see reported.
I'm pretty sure the founders got extremely diluted after their two most recent rounds.
Unfortunately start-ups in emergent markets have very little leverage to negotiate reasonable terms, especially when there are just a few institutional investors willing to bet on these markets.
Also since these businesses require so much capital and have burn rates that grow exponentially there's little room for negotiation. Unless you want to wait and see how Uber eats your lunch.
Reminds me of this comment https://news.ycombinator.com/item?id=17779751 about DoorDash which was false. Given some of the same investors are in Rappi, I would not immediately assume they have funky terms.
First of all DoorDash and Rappi are not comparable, as much as they provide the same type of service.
If you're rapidly growing company in South America trying to raise money from American/Asian investors, you're already in disadvantage.
You could totally get competing term-sheets for a company raising money to operate in these markets but nobody is dropping their pants to give money to these companies when they could be easily pouring money into safer markets. These are companies raising unprecedented rounds for markets in which the delivery fees are in their majority under 1 USD. As they keep expanding and growing their business they will have to shave a lot of profitability, while dealing with the unpredictable economic nature of these countries (for example Argentina, one of their markets, is currently going through an economic crisis - their currency is basically worthless, bank rates at 60%, inflation expected to be at 26% this year...not
a great time to pay for food delivery)
I'm not saying that these investors are sharks and just being predatory for the sake of being pieces of shits. What I'm saying is that given the market, the opportunity, the risks, the environment and the competitive landscape is very unlikely that they are leaving these deals without severely affecting the common stockholder pool.
These investors have the fiduciary responsibility of getting the most out of their funds and I really don't see why they would give 200MM USD to a company that operates in emergent economies without getting a huge chunk of ownership.
Anecdote from this past Tuesday, for what it's worth: At a Starbucks in Buenos Aires, Rappi was set up at the table next to ours, doing interviews to hire delivery people.
A friend who uses these services more than me said he likes Rappi because you can see in real-time where your delivery is.
There's no Uber Eats in Buenos Aires yet though, and it would probably be a pretty dangerous endeavor given how violently taxi drivers have been reacting against Uber drivers. Any person on a bicycle or skates with an Uber logo on them would essentially become a moving target for some frenzied taxi driver to run over.
Congratulations to Rappi, it’s crazy dificult to raise money in Latin America. I’ve seen so many good teams/products/services fade away due to inability to raise capital.
I remember when Pathao, a delivery service from my home country was valued at 100M, I thought it was a lot of money. Having spoken to the people who work there, they told me that the margins are slim, so I'm guessing that you basically make money on volume of deliveries.
Rappi is so heavily price subsidized that I wonder what will happen with them once they stop burning through VC. For perspective, the average delivery fee in Buenos Aires is < $1, and they guarantee < 35min deliveries or your money back.
Is there any other succinct way of describing "privately owned companies valued at over $1B" besides as "unicorns"? The animal type of unicorn is awesome, and I feel actual unicorns ought to be protected from capitalism (and probably from humans in general). Using the word in a business context seriously detracts from how magical unicorns actually are.
Narwhal-horse hybrids should be studied for any genetic or structural uniqueness they might express. And their parents should be observed to discover the mechanics of their copulation.
