Rappi, the prominent Latin American delivery app, has teamed up with FinTech R2 to offer loans to restaurants in Mexico and Colombia, as it seeks to provide support for its partners and expand its business. The delivery platform, backed by SoftBank, plans to offer up to $60 million in loans to restaurants that have been selling through the app for at least three months.
Alejandro Solis, Senior Vice President for Rappi’s operations in Spanish-speaking Latin America, emphasized that their primary objective is to help restaurants grow and succeed. “We win through commissions on the sales. So we gain if they sell more,” Solis stated in an interview with Bloomberg.
The commercial lending program will initially target Rappi’s 50,000 restaurant clients in Mexico and 30,000 in Colombia. If successful, the program may expand to the other nine countries where Rappi operates later this year. This move comes as Rappi faces competition from other players in the market, such as Naspers’ iFood and UberEats, prompting the company to explore additional revenue streams.
Rappi has already established itself as a super app, offering a diverse range of services, including restaurant meal deliveries, grocery deliveries, consumer goods, and an entertainment hub with games, music, and live events.
The FinTech partner in this commercial lending initiative, R2, is a Mexico City-based lending platform that raised $15 million in a Series A funding round in September 2022. R2’s lending infrastructure enables platforms to provide capital to buyers and sellers in Latin America. The additional funding has allowed R2 to expand its team in areas such as engineering, product development, data analysis, risk management, finance, compliance, and partnerships.
R2 was founded in 2020 and has been making strides in offering financing solutions to small businesses in the region. Their embedded lending partnerships have enabled over 3,000 small businesses to access much-needed capital, driving significant growth in their monthly revenue.
As Rappi diversifies its services and strengthens its offerings, the collaboration with R2 represents a strategic move to provide valuable financial support to its restaurant partners, ultimately fostering growth and enhancing the platform’s competitive position in the Latin American market.