The super app of Colombian origin has made positive numbers for the first time since it landed in the South American nation, in 2018. The implementation of the Turbo service and multi-verticality have been key in the process.
The year 2024 has had a great start for Rappi in Peru. At the end of the first quarter, the operation of the super app registered profitability for the first time since it landed in the Andean country, in 2018.
“In Peru, we are already profitable as a company and we are very proud to have achieved that goal in our career. It has been a long process, but now it gives us confidence that we are on the right path and doing things well. This also allows us to have the ability to continue investing, growing, betting on new technologies,” Spencer Friedman, CEO of Rappi in Peru and Ecuador, tells AméricaEconomía .
And although he does not specify how much the black ink figures amount to, the executive affirms that this year they project a growth of 30%, versus 35% in 2023. To date, they have more than 11,000 affiliated businesses and more than 30,000 independent delivery people registered in the application.
The news of profitability comes at a good time, taking into account the company's plans to go public. For the latter, the unicorn of Colombian origin hired its first financial director (CFO), the former Mercado Libre, Tiago Azevedo, earlier this month.
Likewise, the results comes to light despite criticism of the startups business model --companies with explosive growth rates and, at the same time, burn a lot of money without registering profits.
“We have achieved a profitable operation and this way we go against critics saying this business model is not sustainable. We have shown that for Rappi, it is. We are in Latin America and we only operate in this region. In the nine countries where we are, we have built a model that works and can last 100 years. We control our destiny and we have the luxury of investing in the things that are going to be the next milestones for the company. We have done all the hard work, all the adjustments in the operation between 2018 to 2023, so that in 2024 we reap all these achievements. (Being profitable) gives us the strength to say that without a doubt we have a secure future for the next 50 years,” says Friedman.
Regarding profitability in the rest of the markets, the Rappi executive is cautious: “We are only talking about Peru. Some statements will be made by our global CEO. I cannot steal the glory of other countries, but yes, we are on the path of forming a startup, growing at all cost, making it profitable and growing,” he says.
THE ROLE OF MULTI-VERTICALITY
On this route to profitability, Spencer Friedman does not hesitate to highlight the performance of the Turbo service (deliveries in less than 10 minutes) in the Peruvian market. “We have reinvented the concept of commerce because it is ultra-fast delivery where there is no competition. We deliver in 10 minutes, and Peru, with an average time of 8.2 minutes, is the winning country in all Latin America, and I would say in the entire world,” he says.
After the success of Turbo, Rappi moved the service to the restaurant sector. “Allies experience up to 30% incremental sales when they implement the Turbo service. We are growing week after week between 15% and 20% and even up to 30%. We already have more than 100 brands affiliated with Turbo. The plan is to double or triple the number by the end of the second quarter. We have the dream that eventually 40% of all restaurant orders will be through the Turbo mode,” says the Rappi executive.
For now, restaurants remains the strongest vertical, representing close to 70% of sales. However, the CEO of Rappi in Peru and Ecuador maintains that others such as pets, malls, pharmacies, supermarkets and La Cesta ( Rappi's dark supermarket proposal that has its own white label), travel, ads, among others, grow at a good pace.
“ Multi-verticality is the key to our success. We not only want to sell food, which is a key part, but we try to offer our users the option of ordering food the first time and from there show the Turbo service and once they try it they are loyal to Rappi. We are informing and educating users so that they live the entire experience, that they are full Rappi and that they look for us for anything or need."
In that sense, Rappi Ads -the sale of advertising within the application- has been growing rapidly. “Today, Rappi Ads is part of the strategy that advertising agencies offer their clients, along with TikTok and YouTube. They come to us because they see the return it can generate and it's great. We create a product that has the famous product, market fit. The demand is so high that there are not so many spaces in the application,” explains Fridman.
Likewise, at the end of 2023 the company launched Rappi Cargo, the last mile service for the B2B market. “With this solution we can connect the website of companies that are not necessarily affiliated with Rappi or may have a portal where they receive their orders and ship through the Rappi Cargo portal. They take care of the entire process until the moment of shipping and we provide tracking to users with a link. Basically it is the same experience that you have when you order on Rappi, but the order is not made through Rappi, but through their own platforms. Many allies have traditionally had their own channel, they enter Rappi and have their virtual store, but they have clients who are never going to download an application; they want to call and talk to the store and instead of turning off that option and losing their users, they keep it, but they sometimes entrust the most difficult part, which is the last mile, to us,” he explains.
Regarding a possible return to the fintech business, Friedman does not rule it out. “There is always the possibility of exploring this. It works very well in Colombia, in Mexico, in Chile, in Brazil. For now we have to focus more on the things we have today, but I do not rule it out at any time,” he concludes.
