(Tech Crunch) Latin American mobile commerce powerhouse Movile and Just Eat, the global online take-out service, have announced a US$50m investment in Brazil’s leading food delivery service, iFood. The raise brings iFood’s total funding to US$62m.
Movile and Just Eat are responsible for investing in all but iFood’s original $1.6mm Series A. Movile invested $4.6 million in the company’s B and C rounds, and last year Just Eat funded a $5.7M Series D and merged its Brazil operations with iFood. Movile CEO Fabricio Bloisi and CFO Arthur O’Keefe sit on the board with Jerome Gavin from Just Eat and Dan Faccio from Naspers, which owns a majority stake in Movile.
Movile, which has a 60% controlling stake of iFood, bills itself as the largest mobile commerce platform in Latin America by a number of indices: Gross Merchandise Value through mobile, net revenues, profits and market share. They’ve seen 80% growth year over year since 2008. Their portfolio of B2B and B2C companies includes some they have invested in, like iFood, Apontador, the “Brazilian Yelp,” and MapLink, the “Brazilian Waze”; or baked from scratch, like Playkids, the number one grossing app worldwide for kids. The company has six co-founders, and Fabricio Bloisi serves as CEO.
British food delivery giant Just Eat is a global player in online takeout ordering, and owns a 30% stake in iFood. Jesper Buch founded Just Eat in Denmark in 2001, and boostrapped its way to a Series A by Index Ventures in 2009. Greylock and Redpoint Ventures invested in 2011, and the company went public in 2014.
“At the time of the IPO,” a spokesperson for Just Eat says, “we estimated the Brazilian online takeaway food market to be worth at least £1bn annually [$1.5 billion] and potentially multiples of this, making Brazil the most attractive market in our industry in Latin America. While we had built a great position in Brazil over the years as the second biggest player, RestauranteWeb, the network effects that come from being a clear leader are significantly better. The merger with iFood to form our Joint Venture was a pragmatic move.”
“We made all sorts of errors in the beginning, but by the start of 2013 we had a good team in place, we were gaining some market penetration, and were very strong on mobile, which we believed in strongly.”
iFood’s genesis pre-dates both of its investors. An engineer named Patrick Sigrist started a food delivery company called Disk Cook in 1997. iFood’s current CEO Felipe Fioravante quit a consulting job in 2009 to join the company with some of his friends. “If we met certain metrics, we’d get some equity in the company,” Fioravante explains on a call from São Paulo. “It was a really informal agreement.”
The idea of creating a modernized take on Disk Cook, a search directory for take-out in your neighborhood, was put on the back burner until 2011. “We realized we were already behind the market, there were already competitors, and we were losing the market that should be hours,” Fioravante says. iFood launched that same year as a spin-out from Disk Cook, and by 2012 they raised a $1.6M Series A from São Paulo-based Warehouse Investimentos, which lasted till 2013.
“We made all sorts of errors in the beginning, but by the start of 2013 we had a good team in place, we were gaining some market penetration, and were very strong on mobile, which we believed in strongly,” Fioravante says. Then Movile invested the Series B, and iFood’s growth curve took a dramatic turn upwards. “When Movile entered the deal we were doing 30,00 orders per month, and we ended the year with 110,000 per month.” Then, last year, iFood bought out Disk Cook.
“In these last three years we’ve seen amazing growth,” says Fioravante. “iFood is now #1 in Latin America, with more than 80% market share in Brazil, and amazing performance on mobile.”