TLDRs;
- Amazon invests $25M in Colombian delivery firm Rappi, securing warrants for up to 12% ownership.
- The move gives Amazon access to Rappi’s logistics network across 400 cities in nine Latin American countries.
- Amazon’s convertible note strategy reduces risk while allowing deeper investment if Rappi hits performance milestones.
- The deal positions Amazon to better compete with MercadoLibre, the region’s dominant ecommerce platform.
Amazon has deepened its footprint in Latin America with a $25 million investment in Colombian delivery company Rappi, according to sources familiar with the deal.
The move, structured as a convertible note, gives Amazon a potential pathway to acquire up to 12% of Rappi if performance milestones are met.
The decision underscores Amazon’s growing interest in Latin America, a region where ecommerce adoption has accelerated but where logistics remain a significant barrier to scaling. Through this deal, the company positions itself against rival MercadoLibre, Latin America’s dominant ecommerce platform.
How Rappi Strengthens Amazon’s Regional Play
Founded in 2015, Rappi has become one of the region’s most influential delivery startups, operating across 400 cities in nine Latin American countries. Its platform connects millions of users to food delivery, groceries, pharmacy goods, and even financial services, offering a “super app” experience comparable to Asian giants like Grab or Gojek.
For Amazon, the appeal lies in Rappi’s last-mile logistics network, which employs more than 350,000 delivery workers. Replicating such a system independently would take Amazon years of investment and infrastructure building. Instead, the partnership allows Amazon to plug into an already established network and bring Prime delivery benefits to Latin American customers faster.
Rappi’s Turbo service, which promises 10-minute deliveries in major cities, also aligns with Amazon’s global push for ultra-fast fulfillment. This operational edge has helped Rappi report $856 million in revenue and 37% year-over-year growth, cementing its position as a key logistics player.
Amazon’s Low-Risk, High-Reward Approach
The deal is consistent with Amazon’s strategy of using convertible notes and warrants to secure options in potential partners while minimizing upfront risk.
By structuring the investment this way, Amazon pays more only if Rappi hits growth milestones, effectively letting Rappi’s success fund Amazon’s deeper involvement.
This model isn’t new. Amazon has deployed similar tactics in industries ranging from airlines to grocery distributors, allowing it to scale relationships into full acquisitions or deeper strategic partnerships once the value is proven.
The Battle With MercadoLibre Intensifies
MercadoLibre currently dominates Latin America’s ecommerce, boasting $5.9 billion in revenue and operations in 18 countries. Amazon’s investment in Rappi signals its intent to challenge that dominance, not only by offering competitive product selection but also by leveraging logistics partnerships to improve delivery speed and convenience.
Rappi already integrates with Amazon Web Services (AWS) for its cloud needs, and Amazon Prime members in Mexico enjoy free shipping through Rappi. This deeper financial partnership could pave the way for synergies in fintech, logistics, and cloud infrastructure, potentially reshaping the competitive landscape in Latin America.
