SAO PAULO (Reuters) - Latin American unicorn Rappi expects to more than triple the number of cities where its delivery app operates in Brazil using most of a $1 billion cash injection by Japan’s SoftBank, its President and co-founder said on Thursday.
Rappi, which delivers food from restaurants as well as groceries, medicine and other products, plans to reach 70 Brazilian cities, up from the current 20 where it operates. Most of the expected growth will occur in Brazil, among the seven Latin American countries where it is present.
Co-founder Sebastian Mejia also said the company plans to enter between two and four countries in the region, without specifying which ones. Founded in Colombia, Rappi is also in Argentina, Brazil, Chile, Mexico, Peru and Uruguay.
Mejia, speaking to Reuters in a telephone interview, ruled out acquisitions to grow after the capital injection, saying the company’s rivals use different technologies.
Rappi received a total of $1.2 billion, Mejia said, including $1 billion from funds managed by Japan’s SoftBank and $200 million from current investors that include DST Global, Delivery Hero, Sequoia Capital, Andreessen Horowitz and Y Combinator.
SoftBank’s Innovation Fund, which is focused on Latin America, and another SoftBank global investment vehicle, Vision Fund, will split the investment evenly. In a second move the Latin America-focused fund is expected to be offered the global fund investment.
The start-up valuation tripled during the last year, and was valued at more than $3 billion by the SoftBank deal, Mejia said, adding that the jump in valuation from $1 billion relates to the company’s fast growth.
Its sales quintupled in the last 12 months. In Brazil, it climbed even faster, by 24 times.
Rappi also plans to use the deal proceeds to build what he calls a super app, where consumers will be able to buy products and services, request deliveries and make financial transactions.
Mejia said the delivery app is not seeking a partnership with a financial institution in the short term but did not rule one out in the future.
Talks with SoftBank lasted only two months. “We are excited to receive the SoftBank investment; it’s the world’s largest investor in startups betting on innovation in Latin America,” Mejia said, adding that technology may contribute to the region’s growth.
Reporting by Carolina Mandl and Tatiana Bautzer; Editing by James Dalgleish