Rappi gets on the financial bike: he will become a bank, give credits and offer car insurance
The Walled City of Cartagena is colorful, with low and old houses and a few cars that break the colonial climate with the noise of its engines. Thousands of people circulate around there every day looking at stores and enjoying cheerful music that usually floods the atmosphere.
But the tranquility of this resort is altered by hundreds of orange clothes that run along its narrow cobbled streets at high speed. One after another, bicycles dodge pedestrians, with their large backpacks decorated with a French mustache and pedaled by people urged to reach their destination in less than 30 minutes.Strictly speaking, this pedaling against the clock is also observed in more than 50 cities in Latin America, in 9 different countries.
- At the regional level, Rappi accounts for 18 million downloads, 85,000 Rappi Active stores and 20,000 allied businesses
- In his native Colombia, he has more than 25,000 dealers and 250,000 active debit cards
- In Argentina, it gathers 10,500 rappers and one million active users
Having achieved these amazing figures, the company (the first recognized unicorn in Colombia) aims to become a "super app". Specifically, that 70% of the mobile interaction of people pass through its platform.
"We are not an application of restaurants. We want to be present in all the tasks of the daily life of each user. From a simple banking transaction or a minimum requirement to issues related to their car, travel or university issues," he assures iProUP exclusively Carlos Correa, director of new business of Rappi
Within the framework of the Latin American Ventures Summit 2019: Impact Revolution in Colombia, Simón Borrero, founder of the company, also talks with iProUP and confirms that the plan to "break the stigmata" of the regional market: "We have a complex in Latin America that it makes us categorize ourselves as "poor." We set mental limits and believe ourselves less than the Chinese or Americans. It's a lie and we can prove it. "
The numbers of its operation and penetration in the regional market not only demonstrate the ability to sustain growth, but also seduced international investments: in May of this year, the Japanese giant Softbank disbursed a whopping $ 1 billion for the expansion of the company and consecrate the idea of an off-road app.A new digital bank
Convergence of services. With this concept the firm defines its present. From having a platform that has millions of visits (and user data) every month, it ventured into the financial market: first with RappiCash (its virtual wallet), then with a more complete service, RappiBank, integrated to all types of banking solutions.
"In Latin America there are historical barriers to access to banking services, with an ecosystem that has great penetration difficulties. The market is looking for greater inclusion," says Juan Sebastián Rosso, director of public affairs at Rappi. "Our solution provides traceable transactions, we reduce the use of cash and improve the formality for those who could not be banked," adds a spokesperson for the company.The firm takes advantage of its extensive history of purchases, transactions and knowledge of thousands of people to provide this type of services leveraged on a strong technological base. "If we have all this data, why don't we fund our users' purchases?" Slips Correa.
Within the framework of this expansion within the world of digital money, it has strategic alliances with traditional players in the banking sector to have its own debit card service (Visa and an allied bank that varies by country) with zero issuance cost And maintenance.
In Argentina, Rappi's payment ecosystem development is not as advanced as in Mexico, Brazil and Colombia, but Matías Casoy, regional manager of the brand, says it is one of the fastest growing business units."Every month the number of operations carried out with the Pagá with Rappi function is multiplied. We have a very aggressive income in shops since we are offering the commissions lower than the market," he explains. It also slides that the debit card (vertical, with NFC and "selfieproof") is considered among the main short-term plans.
In addition, they have a strategy to win share to Mercado Pago in QR payments. "We have a very aggressive business entry strategy: we offer lower commissions than the rest of the market. And users receive a refund as part of what they paid at RapiCredits," he says.
And he asserts: "Rappi will work as a bank. This will open the doors to faster and cheaper solutions for businesses and users, thanks to the use of the QR Code, cards and immediate transfers, including international."
"We are working as quickly as possible, talking with regulators in each country, but technology always goes faster than traditional structures," adds Correa.Custom solutions
Hard users (the most frequent in the ecosystem) can use Rappi up to ten times a day: at breakfast, shop at the pharmacy, send a product at noon to a place, get cash, do grocery shopping, hire a skateboard, among other tasks.Currently, it has about 60 different business units. Even in markets such as Brazil, it has varied and even unthinkable services, such as renting umbrellas per minute.
However, one of the most attractive and innovative aspects is car insurance. "We connect the brokers with the demand. With one click you can take out the insurance, the policy arrives in your mail and you get RappiCredits to spend on any of the other services," says Rosso.
"It is our loyalty program and so we make users perform all their operations on our platform," he completes. The cornerstone is the relationship with strategic allies and their integration.Today, the "cake" of the business is distributed as follows:
- 50% restaurants
- 30% consumer goods (pharmacy, supermarkets and spirits)
- 20% the rest of the verticals (each represents 5%).
This "virtuous ecosystem" seeks that customers do not leave the digital space and use their "digital currency" of Rappi (Rappi Credits) to finance consumption: to buy airline tickets, plan vacations, pay for services and even public transport, as already It happens in Mexico.
In addition, he is working to "customize" the user experience within the app, so that everything is relevant to them: "If I am a vegetarian, I do not want Mc Donald's to appear, but an alternative that serves me. We want the app to know what each one needs and gives customized solutions, with commercial dynamics of each region ".A sustainable business
Within the framework of the collapse of some of Softbank's most promising investments (WeWork, Uber and Slack, at the head), from Rappi they want to separate from the excessive capital injection model and ensure that "it is a healthy company". Therefore, and beyond having a bulky wallet - with the million-dollar zeros of the Japanese fund - in Colombia it already shows positive numbers and in Mexico it is close to the break even (balance between income and expenses)."We have been working on improving the productivity and efficiency of the algorithm, which will optimize the value of each order. We are raising our valuation from the green numbers," says Correa. Its founder states that the most promising market in the region is Mexico, where it invested US $ 300 million in its expansion and consolidation of its model.
"All the decisions are made based on the information we have. Softbank does not put pressure on us, but it is always very positive to have all that money in the bank. The idea is that our IPO is with an already profitable, tested and proven model. after having changed the lives of millions of people, "Borrero explains to iProUP.
"The money that Softbank gave us," he adds, "allows us to be more aggressive and generate greater impact." The company began a dialogue with authorities, unions, companies and workers to agree on new regulatory structures that help facilitate operations and work frameworks for its activity.
In this sense, Rosso argues: "The International Labor Organization is rethinking what is coming because rigid rules no longer work and this type of model does not work. This disruption generates friction, so we have to talk and see how to work with the coexistence of the different sectors. ""Companies like Rappi invest in local economies and open opportunities for restaurants and local enterprises. Governments should consider us as allies. If a review is made, this is good for the people and the economy," Borrero reaffirms.
"Legislation lags behind and we must generate progress. In Argentina, we must not keep the obstacles imposed by unions and some authorities. On the contrary, we must work together," he concludes.