Acquisitions & Partnerships Indicate Latin America Online Delivery Growth
LATAM delivery startups are experiencing rapid growth, including partnerships and acquisitions, to expand into new markets within the region. In contrast, some of the region's largest, longstanding companies are suffering.
Startups in the delivery industry have been thriving in Latin America completing recent acquisitions and partnerships. This contrasts the fate of one of the world's largest airlines, based in Chile, getting rejected for a bankruptcy loan. For the full details on these happening and additional weekly news check out our newsletter, LATAM Business Weekly.
Leading European Food Delivery Service Expands Market Share By Purchasing Spanish Delivery App's LATAM Operation
Berlin-based Delivery Hero announced it will take over Spanish delivery app Glovo’s Latin American operations paying up to roughly $270 million USD. The transaction will give Delivery Hero access to Argentina, Peru, Ecuador, Panama, Costa Rica, Honduras, Guatemala and the Dominican Republic.
The sale means Delivery Hero will add five new markets to its footprint in the LATAM region. It will also eliminate a direct competitor in three markets (Argentina, Panama and the Dominican Republic). Niklas Östberg, CEO and Co-Founder of Delivery Hero, comments on the acquisition and the growth opportunity he sees in Latin America (source Tech Crunch):
“Latin America is a region with exceptional growth potential for online delivery. Acquiring Glovo’s local operations gives us the opportunity to double down on our efforts to drive innovation, continuously improve customer experience and support local vendors in the region. We have been working closely with Glovo for many years, and are proud to incorporate their Latin American services into our global network.”
eCommerce Delivery Startup Streamlines Onboarding and Enhances Security with Identity Verification Partnership
On-demand delivery startup Rappi, a Colombia “Unicorn” has partnered with Jumio, a leading provider of AI-powered identity verification and authentication solutions. The partnership will help Rappi identify new customers and delivery couriers.
Rappi wants to create an automated digital onboarding experience for RappiPay, a virtual wallet and debit card, and for its delivery business lines. This will help scale business across geographies and align with compliance mandates, including KYC requirements.
Rappi has integrated Jumio Identity Verification for RappiPay in Mexico and Peru. Additionally, the company uses Jumio Document Verification and Jumio Screening to comply with Mexico’s ever-evolving regulations. Since partnering with Jumio, more than 750,000 users have successfully opened new RappiPay accounts. Juan Pablo Ortega, Rappi’s Co-Founder, discusses the impact of the partnership (Business Wire):
“With Jumio, we can confidently verify the identities of our banking customers and delivery drivers almost instantly and without the need of human review. We have also been able to make our platform much more secure by authenticating our drivers before each delivery.”
While the future of Latin America delivery businesses appears promising that is not the case for the airline industry.
Judge Rejects LATAM’s Largest Airline's Bankruptcy Loan
A U.S. bankruptcy judge rejected a $2.4 billion financing plan for struggling LATAM Airlines, on the basis that “a convertible loan included as part of the package would amount to ‘improper’ treatment of other shareholders.” However, he ruled to “leave the door open” for the company to introduce a similar financing plan in the future.”(Reuters)
LATAM Airlines initially filed for bankruptcy protection in May 2020. At the time, it was the world’s largest airline to file for bankruptcy due to COVID-19. In July, it presented its financing proposal which included a $1.3 billion loan from asset management firm Oaktree Capital Management and a $900 million convertible loan from several key Latin American shareholders. Challengers assembled a separate funding plan with investment bank Jefferies Group, with the key dispute over the propriety of the convertible loan.