Rappi Buys Brazil’s Box Delivery, Brings In Mall Operator as a Partner

The deal represents the largest acquisition by the Colombian startup, which will unite its delivery operation to meet the demand from restaurants and go head-to-head with Prosus-owned iFood

Colombian startup Rappi buys rival Box Delivery and gains scale and expertise in restaurant meal delivery
April 10, 2023 | 01:15 PM

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Bloomberg Línea — SoftBank-backed Colombian unicorn Rappi hasbought Brazilian startup Box Delivery, its biggest acquisition since it was founded in 2015.

The value of the deal was not disclosed.

The aim of the buyout is to unify the operation of the two companies’ delivery drivers to meet demand from restaurants in Brazil, something that became possible, according to Rappi, after Brazil antitrust watchdog restricted Prosus-owned iFood’s exclusivity agreements with these establishments in February.

The deal announced early Monday, which is pending approval from Brazil’s antitrust watchdog, involves a part-cash payment, mainly, partly in shares, and represents the entry of Aliansce Sonae, an investor in Box Delivery, as a minority shareholder of Rappi.


“We’re probably going to be one of the biggest companies focused on serving this segment of delivery guys,” Sebastian Mejia, co-founder and president of Rappi, said in an interview with Bloomberg Línea.

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He did not share figures on the new size of the Colombian startup in Brazil, but said it is “still very early” and that there are opportunities to continue growing in the country, which justifies the bet on the market.

This is the largest acquisition Rappi has ever made and represents an exception, not a new strategy of inorganic growth, according to Mejia, who said mergers and acquisitions “are not part of the DNA”.


“We have not built Rappi by doing acquisitions. It’s simply not our story. This is the only major acquisition,” Mejia said.

According to PitchBook, Rappi bought stakes in Payit in February 2019, in Riogrande in May 2020, and acquired Brazil’s Avocado in June 2020. The company also reportedly joint-ventured with Banorte in a $15 million deal in June 2020, as well as participating with a $24 million Series A investment in fintech Slope in April 2022.

Box Delivery, founded in 2016, is a startup of so-called last-mile deliveries, that is, the final transportation of meals (or goods) to the consumer’s home. The company has about 150,000 registered delivery drivers and operates in 250 Brazilian cities, 18 states plus the Federal District.

Now, Box Delivery’s 450 employees will join forces with Rappi’s 10,400 employees.


The company makes about 1.7 million deliveries per month and had revenues of approximately 200 million reais last year ($39.4 million)

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For the founder of Box Delivery, Felipe Criniti, the deal represents the next step to maintain the operation and seek growth after the startup failed to capture its Series B at a time when the market closed to investments in more advanced-stage companies.

While Rappi operates a direct-to-consumer model and its remuneration also comes in part from the fees of establishments, Box’s clients are companies, both e-commerce and restaurants and snack bars.


Its platform has integrations with order capture applications such as Rappi, as well as competitor iFood, among other points of sale such as Quiq, a platform that unites chains such as Outback and McDonald’s.

Last year, the startup spent 35 million reais ($6.8 million) to buy Vuxx, a marketplace for transporting medium-weight cargo.

Aliansce as a partner

Aliansce Sonae, which recently merged with brMalls, has decided to stay on and become an investor in Rappi with a minority stake.

“Minority, not relevant,” said Renato Floh, director of digital and omnichannel of Aliansce Sonae, in an interview with Bloomberg Línea.


While not disclosing figures, the executive said the transaction with Rappi guaranteed a “very interesting” financial return for Aliansce.

“From a financial point of view, it was also an interesting move. I can’t give values or orders of magnitude here. But it was interesting on two aspects, strategic and financial,” said Floh.

Box received $5.6 million in a deal led by Aliansce Sonae in June 2021, within a corporate venture capital strategy, which, according to the company, allowed it to expand its operational capacity to deliver goods in the regions surrounding the malls on the same day.


According to Aliansce, since that investment, that is, in just under two years, Box increased its number of deliveries from 400,000 to 1.7 million per month. Revenues increased by 222%, totaling approximately 200 million reais in 2022.

Box Delivery also supported the implementation of logistics hubs in 20 Aliansce malls.

“Our big goal is to support retailers, whether food or merchandise, to sell as much as possible regardless of the channel,” Floh said of the goal of ensuring logistics structure to retailers through delivery partnerships, so they can deliver goods faster, with lower costs because of volume.


Although it will become a partner of Rappi, Aliansce said it intends to maintain its link with competitor iFood, which currently has six hubs in Aliansce malls.

“We have no link with Rappi from the point of view of exclusivity or obligation. Ultimately [iFood] is one more player that we are relating to. And we would be anyway, because we are not relevant as an investor in there [of Rappi],” he said.

“Nor do we expect us to have that obligation on the other side either. iFood is still with us and we even continue to look at other growth levers with them. If there are new opportunities for us to go deeper, we’ll do it, as well as create new ways with other players.”


Box Delivery: How does it work?

“Box has reached a stage for which the fundraising world today is closed. It has money for pre-seed, seed, and even a Series A, but for the size that would be the cheque we were going for [according to PitchBook, for this stage of fundraising it was seeking around $10 million], the market is closed. Waiting for a new window didn’t make sense. This opportunity arose, and we decided to take advantage of it”, said Felipe Criniti, founder of Box Delivery, in an interview with Bloomberg Línea.

Criniti said that talks with Rappi began in the second half of last year, while he was looking for a new pickup. “In 2022, we set out to raise, but the market closed and consequently there wasn’t a window for us to take advantage of,” he said.

“Box was already at a breakeven point and the money we raised in 2021 was enough to maintain operations and continue to grow, but I understood it was a cycle that made sense. And now to start another one as an executive at Rappi,” Criniti said.


“The company generates EBITDA, but not high enough to grow at the same rate we grew from 2020 to 2021 and into 2022. We need capital and cash flow″, the Box Delivery founder said of the alternative of taking the next step with Rappi. The startup flourished during the pandemic, from 12 to 100 cities, when restaurants needed delivery to survive.

“Today nothing changes, we don’t have a vision of what tomorrow will be, I don’t even know what’s there on the other side, they don’t know what’s here, I think everything is new for everyone. We will sit down to understand what the structures are and then think about a future integration plan”, said Criniti.

Rappi investors

Rappi raised $108.6 million in its latest Series F round with CrossWork, Opera Ventures, and Atman Capital Partners in September 2022, with a pre-money valuation of the company at $5.25 billion. ONEVC founder Atman Capital Partners sold a stake in the company to an undisclosed buyer. Before that, FJ Labs also sold its stake in the company.

Today, SoftBank is one of the investors in the startup, which is also backed by big venture capital names uch as T.Rowe Price, Sequoia Capital, Tiger Global, and Andreessen Horowitz.

- Daniel Salazar Castellanos contributed to this story

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