Today, we launch our report on Rappi: The $7B Meituan of Latin America.
Read it, and drop a reply to this email to let us know what you think.
- We value Rappi at $7B, 7x EV/2022 revenue, up 75% from the last round price of $4B. We expect a long growth runway ahead, with a 3-year GMV CAGR of 50%. Online adoption in Latin America is still at a low single-digit percentage, compared with 10%, 12% and 18% in India, the U.S. and China respectively.
- We estimate that Rappi has one of the lowest delivery expenses as a percentage of GMV at 10%, compared to 14% from Zomato (India), 16% from Meituan (China) and 32% from Uber Eats (U.S.).
- There are strong parallels between Rappi’s strategy and the playbook Meituan used to win in China and build a $250B company: both companies are using high frequency, low margin verticals to gain mindshare and cross-sell into low frequency but high margin verticals
- There are signs that this cross-selling strategy is bearing fruit: more than 90% of customers purchase from at least two categories using Rappi, and by cohort, purchase frequency increases over time, with an average of 2 purchases per month in year 1, 6 purchases per month in year 3, and 11 purchases per month in year 5.
Thanks,
Nan
