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Contxto – Glovo has thrown the world for a few curveballs over the past 24 hours, the first being its departure from Chile. As of today, the Spanish home delivery app ceased to exist in Chile based on low turnovers and inability to retain market share.
In spite of this obstacle, Glovo recently acquired Peruvian rival company, Domicilios.com, to refocus its regional efforts. Shortly after this announcement, it appears as though the company raised around US$169 million in Series D funding.
We reached out to a Glovo representative to make better sense of these series of events. Since we’re still waiting for a response, though, here is what we know so far.
As expected, funds will be allocated towards bolstering growth in international markets, particularly those in Africa, Europe and Latin America. Additionally, Glovo would like to increase its engineering team, in addition, to expand services to include more than just food. Groceries, laundry and pharmaceutical delivery services are potential developments for the company to adopt.
Now in terms of the acquisition, it just so happens that both Glovo and Domicilios.com (not to mention other last-mile delivery apps like Rappi and Pedidos Ya) belong to the same German shareholder, Delivery Hero.
To overcome hurdles in Chile, Glovo purchased Domicilios.com’s operations in Peru as well as Ecuador from the parent company. Prospects are particularly high in Peru for Glovo’s co-founder Sacha Michaud, especially in terms of potential revenue and growth opportunities.
“Peru should be one of the top three worldwide markets at the end of the year, along with Spain and Italy,” said Michaud. The executive has his eyes set on the Peruvian capital and outlying provinces.
Drago Macan, country manager for Glovo Peru, recently confirmed Glovo’s purchase of Domicilios.com from Delivery Hero. At this point, everything seems to be in order.
“There is a session of operations in the region,” said Macan. “Chile, Glove passes into the hands of Domicilios and now it’s the opposite for Peru and Ecuador.”
Formerly known as LimaDelivery, Domicilios.com historically covered Lima, Trujilo and Arequipa in Peru. Before the acquisition, it was also trying to premier in Chiclayo and Piura. Based on research, however, it appears as though Glovo could effectively pick up from where Domicilios.com left off.
Specifically, Glovo premiered on the Peruvian market towards the end of 2017. Since then, the number of users has grown to more than one million with over 6,000 active delivery drivers across the Andean country. For 2019, Glovo would like to double the number of distributors as well as turnover.
According to a report from the marketing research group CCR, Glovo is the most known delivery system in Peru followed by Uber Eats and Domicilios.com. Within the same results, both Glovo and Domicilios.com were apparently the most preferred brands among surveyed consumers.
Nowadays, Glovo operates in 124 cities in 21 countries employing over 1,000 people. More than 400 of these employees work out of the Barcelona headquarters, not to mention over 35,000 active “Glovers” (delivery drivers) using the platform.
While it may have seemed like Glovo was fighting for its life in Latin America as of yesterday, this new funding round may prove otherwise. I must say, though, the decision to purchase a rival company immediately after closing operations in Chile seemed like a desperate attempt to remain active in South America.
Based on the new funds, however, maybe Glovo will come out unscathed after all. On top of it all, Glovo’s main competitor, Rappi, is said to be raising around US$1 billion in fresh funding from SoftBank. Talk about working under pressure.
I can’t help but wonder, though, if this has been Glovo’s plan all along. It takes months to raise capital, so it wasn’t like this Series D funding came out of nowhere. The timely is just so strange.
The question remains: will Glovo prosper better in Ecuador and Peru than it did in Chile? Will the startup grow at a sustainable rate? It’s probably too soon to tell but I’m undeniably curious to see where this goes.