Amazon.com Inc. has invested in Rappi Inc., a Colombian delivery company, forging a strategic partnership that combines the retail and technology infrastructure of the American corporation with one of Latin America's most prominent last-mile delivery businesses.
This agreement is expected to give Amazon access to Rappi's extensive logistics network, thereby increasing its competitiveness against major rival MercadoLibre Inc. Meanwhile, Rappi receives backing from the leading North American online retailer, along with the opportunity to leverage Amazon's logistics system and cloud computing platform.
The initial investment is worth 25 million USD in the form of convertible bonds, according to sources familiar with the deal. Although small compared to Amazon's scale, the agreement allows the Seattle-based corporation to acquire up to 12% of Rappi's shares through warrants if predetermined targets are met. The terms are subject to change, the sources said. Representatives from both Amazon and Rappi declined to comment.
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A Rappi delivery worker in Mexico City. Photo: Mayolo Lopez Gutierrez/Bloomberg |
A Rappi delivery worker in Mexico City. Photo: Mayolo Lopez Gutierrez/Bloomberg
In recent years, Amazon has often used warrants for direct investments in partners such as airlines, food distributors, and electronics manufacturers to benefit from growth driven by Amazon's own business activities.
Founded in 2015, Rappi quickly expanded its reach from Mexico to Chile with its "Turbo" service, promising delivery of everything from wine to toothpaste in under 10 minutes. Beyond food delivery, Rappi has branched out into finance with an e-wallet, credit cards, and savings accounts licensed in several countries, including Colombia.
The company is currently funded by several major investors, including SoftBank Group Corp, Sequoia Capital, and T. Rowe Price. Last year, CEO and co-founder Simon Borrero revealed that Rappi plans an Initial Public Offering (IPO) in 2025, most likely in New York. Last month, Bloomberg reported that Rappi secured a 100 million USD loan from Banco Santander and Kirkoswald Capital Partners.
Amazon's new investment builds upon existing commercial collaborations with Rappi. The Colombian startup is currently a customer of Amazon Web Services. In Mexico, Amazon offers Prime members a year of free deliveries through Rappi.
Amazon.com Inc. ranks first on Transport Topics' Top 100 largest logistics companies in North America, 15th on the TT100 list of the largest private carriers, and first on the list of the top 50 global freight transportation companies.
Hai My (Transport Topics)
