How Rappi went from delivery to developing a financial super app

rappi rappipay

Colombia is a country where the FinTech entrepreneurship ecosystem is emerging at an incredible rate and FinTech startups are changing the game rules for the banking industry. 

In this framework, a simple delivery app is today one of the largest startups in LatAm, valued at $5.2 billion - we are talking about Rappi.

Rappi Cash, Bring Your Cash Everywhere

Launched in 2015 by Simón Borrero, Sebastian Mejía, and Felipe Villamarin, Rappi started becoming popular when they promoted it by giving away donuts in exchange for downloads. 

Rappi’s story is interesting as the app landed in financial services (and inclusion) starting from a very different business. 

Rappi was, in fact, an early mover to build the region’s vast network of couriers and last-mile logistics. The company was the first one in Colombia with its own fleet of bicycles and motorcycles, and later harnessed the disparate networks across the region, transforming what was originally an on-demand delivery app into a multi-industry digital marketplace. 

In the last six years, Rappi has launched different new verticals, such as Rappi Travel or Rappi Entertainment. 

Answer the need for cash

From a financial inclusion perspective, the most interesting vertical is without doubt Rappi Cash, an option which allows users to bring cash to the user wherever they need it. 

The company realized the need for users to have cash at their fingertips, so they activated an ATM service to receive money from any site. However, the Great Leap to become a super app was in 2019. 

From Delivery App to Digital Banking

That year, the Colombian super app received a close to 1 billion USD investment from the Japanese conglomerate SoftBank. They aimed at becoming a digital bank. 

In June 2022, following first talks throughout 2021, Colombia's Financial Authorities granted authorization to RappiPay, a joint venture between Rappi and bank Banco Davivienda, to operate as a financial entity in the country. 

"We want to be a full bank, where we'll be an ideal bank for all those within the Rappi ecosystem - not just individuals who are consumers, but also Rappi delivery workers and legal entities like businesses," RappiPay Colombia president Gabriel Migowski told Reuters in an interview. 

In the blink of an eye, Rappi managed to position itself as one of the leading apps in Latin America, operating in 9 countries on LatAm, in more than 250 cities, with administrative offices in Bogotá, Sao Paulo and Mexico City. However, until 2022, it does not offer full banking services yet. Today, after the green light from Colombia watchdogs, the super app is ready to be a game changer in the fintech arena. 

About Rappi Pay: Driving Financial Inclusion 

Rappi Pay, founded in 2018, was launched as a financial service provider offering near-field communication-based prepaid cards and wallets for consumers across Colombia. 

After receiving its banking licence, RappiPay now offers a full suite of financial services, providing full money control and managing solutions to its users, without requiring any paperwork. 

Through the 100% digital app, RappiPay users can send and collect money, transfer funds to any bank across the country, pay utilities and bills, withdraw cash at any Davivienda ATM in Colombia, and perform other services, all without any costs or commissions. In addition, the RappiPay card enables frictionless and fast payments for in-store shopping.

As pioneer of financial inclusion, RappiPay is in the first line to provide financial products and solutions to underbanked and underserved Colombians, boosting the country’s digitisation programme and driving financial inclusion at the same time. 

According to RappiPay’s CEO, Gabriel Migowski, “the capital infusion shows the market’s support and trust in RappiPay, guaranteeing the necessary resources to continue delivering high-end digital payments solutions to citizens across Colombia”. Recently, the app has also obtained a $112M financing in a credit to boost financial inclusion in Colombia. The financial credit granted to the fintech was provided by Bancolombia, Banco de Bogotá, Davivienda, and Itau. 

According to company figures, RappiPay has already issued more than 215,000 credit cards in the country, through which it has issued close to USD 4 million in cashback, highlighting that for more than 40% of users, this is their first credit card. Thus, in just over a year, more than 80,000 new users have entered the financial system with a RappiPay product. 

“The credit contribution we obtained is very positive for us, other fintechs, and the economy. It will certainly have a significant impact on reducing costs and improving profits in our market,” commented RappiPay’s CEO.

From Mexico to Chile, the key is creating Cross-Border partnership 

What is outstanding about Rappi is its cross-border partnership network. At the beginning of the pandemic outbreak, the FinTech signed an agreement with Mexican Grupo Financiero Banorte to create a platform offering digital financial services in Mexico. 

In 2021 Itaú Corpbanca, the fifth-largest private bank in Chile,and Rappi were working together to bring greater financial inclusion to Chile. Another strategic partnership was signed with Chubb, the world's largest publicly traded property and casualty insurer, to co-create customized digital insurance offerings for the Rappi’s millions of users across the region.

Since its first launch, Rappi has expanded its services and offers almost everything. The company had the bold ambition of becoming the most complete app in the lives of Latin Americans and it succeeded. So what’s next? The company will focus to consolidate itself as the first and biggest super app in Latin America major economies such as Mexico and Brazil.