Amazon takes stake in Latin American delivery firm Rappi

Amazon has invested in Rappi, a delivery company based in Colombia, through a US$25 million convertible note, according to a source familiar with the deal.

This partnership could allow Amazon to access Rappi’s logistics network in Latin America as it competes with MercadoLibre, a major ecommerce player in the region.

The deal includes warrants that could let Amazon acquire up to 12% of Rappi if certain milestones are reached, though terms may change.

Rappi, founded in 2015, operates delivery services across Latin America and is backed by investors such as SoftBank, Sequoia Capital, and T Rowe Price.

The company also offers digital wallet and banking services in markets like Colombia.

Rappi is already a customer of Amazon Web Services, and Amazon Prime members in Mexico get a year of free shipping via Rappi.

Both companies declined to comment on the investment.

🔗 Source: Bloomberg

🧠 Food for thought

Implications, context, and why it matters.

Amazon’s warrant strategy minimizes risk while maximizing upside potential

Amazon’s $25 million convertible note with warrants to acquire up to 12% of Rappi follows an established pattern the company has used with strategic partners including airlines and grocery distributors1.
This approach allows Amazon to test partnerships with minimal upfront investment while securing the right to increase ownership if the relationship proves successful.
The warrant structure means Amazon only pays more if Rappi hits performance milestones, essentially letting Rappi’s success fund Amazon’s deeper involvement.
This strategy has proven effective for Amazon in building strategic relationships that can evolve into larger acquisitions or deeper partnerships based on proven results rather than speculation.

Last-mile logistics partnerships offer faster market entry than building infrastructure

Amazon has historically invested billions building logistics networks globally, including over 175 fulfillment centers occupying more than 150 million square feet2 and acquiring 40 Boeing aircraft for air delivery3.
By partnering with Rappi, Amazon gains immediate access to an established last-mile delivery network serving 400 cities across nine Latin American countries with 350,000 delivery workers4.
Rappi’s “Turbo” service promises 10-minute deliveries and has achieved $856 million in revenue with 37% year-over-year growth5, demonstrating operational efficiency that would take Amazon years to replicate independently.
This approach allows Amazon to compete more effectively with MercadoLibre, which reported $5.9 billion in revenue and commands significant market share across 18 Latin American countries6.