COLOMBIA – iFood, one of the leading food delivery platforms in Latin America has merged with Delivery Hero’s business in Colombia, Domicilios.com to enable the companies expand and strengthen their footprint in South America.
The companies did not disclose the value of the transaction but will result in Brazil-based iFood holding a 51% equity stake in the partnership, while Delivery Hero will hold the remaining 49%, reports TechChrunch.
Together, iFood and Domicilios.com say they will have the largest geographic coverage of any food delivery company in Colombia. Domicilios.com is already present in 30 cities and has a network of 12,000 businesses.
The new venture is expected to rival SoftBank-backed Rappi and Uber Eats who are also present in the market.
iFood is not new to the market and expects to leverage its business intelligence and management solutions as well as endorsements by the Movile Group and Just Eat, a leading global hybrid market for online food delivery.
However, Rappi has a strong financial muscle and has raised a total of US$1.4 billion in funding over eight rounds, including a US$1 billion injection from SoftBank in 2019 that marked the largest single investment into a Latin American startup.
Since its launch, Rappi has also expanded its delivery portfolio to pharmaceuticals, banking services and furniture, in addition to groceries and restaurant delivery.
Domicilios, the Colombian online food ordering startup, raised US$47.7 million before it exited to Berlin-based Delivery Hero for an undisclosed price in 2014.
Domicilios’new partner, iFood has a strong presence in its home country operations, Brazil, where it serves over 147,000 restaurants registered in more than 1,000 cities but a weaker footprint in Colombia.
iFood said that the partnership will expand its presence in Colombia. “It’s time for us to increase our presence in Colombia, which is a strategic country,” said Fabricio Bloisi, iFood’s CEO, in a statement announcing the deal.
iFood expects the transaction to drive business growth for restaurants and delivery partners in the region, while generating more competitive delivery products and services for Colombians.
The transaction still needs regulatory approval and iFood said they expect the review to take place within two months.