Prosus buys full management of iFood and values the corporate at as much as €5.4 billion (virtually R$28 billion!)
The Dutch internet giant is paying €1.5bn, in cash, plus an additional amount of up to €300m for 33% of iFood.
Dutch group that brings together the international investments of the South African fund Naspers, Prosus already has a close relationship with Brazil, by maintaining in its portfolio holdings in local companies such as the application holding Movile, fintech Creditas and Kovi, a startup subscription cars.
Now, the company is reinforcing its appetite for business in the country. This Friday, the company announced the purchase of the remaining 33.3% share that Just Eat held in iFood, the company that owns the main food delivery app in the Brazilian market.
The agreement involves the payment of €1.5 billion, in cash, plus an additional amount of up to €300 million. In practice, the terms of the deal value iFood between €4.5 billion and €5.4 billion (something between R$22.75 billion and R$27.30 billion).
With the transaction, Prosus and Movile, which had been investing in iFood since 2013, will now fully control the operation. Founder of the Brazilian group, Fabricio Bloisi has been, since 2019, the CEO of the app.
“Increasing our ownership to full ownership reflects our confidence in the long-term potential of iFood. We are excited to continue to be an active and supportive partner of iFood as the company enters its next phase of innovation and growth.”
Fabricio Bloisi added in the statement: “Prosus has been a committed partner with iFood and Movile for the past decade. I am delighted that they continue to believe so strongly in our vision and ability to build a successful business.”
By “snatching” the remaining stake in iFood and taking over 100% of the operation, Prosus also reinforces its menu of investments in the delivery sector. Today, its global portfolio in the segment includes companies such as Delivery Hero, present in more than 50 countries, and Swiggy, which operates in India.
iFood brings relevant numbers to the table. Founded in 2011, the company has 330,000 restaurants and 200,000 couriers registered in its base, with a monthly volume of around 70 million orders and a presence in 1,700 cities.
In addition to Prosus, Movile and Just Eat, the company has already attracted, in its trajectory, approximately US$ 2.1 billion in contributions from investors such as Warehouse and Innova Capital. In 2018, the company officially entered the group of Brazilian unicorns.
Since then, iFood has expanded its scope to other areas. Among them, the supermarket shopping deliveries category and, more recently, in the benefits segment. But it is in its core business that the company really took off.
This evolution is reflected, for example, in the departure of Uber Eats from Brazil, in 2021. The decision of the food delivery arm of the American giant Uber to leave the country was motivated, among other factors, precisely by not being able to compete with the rival place.
This domain, however, was accompanied by a series of controversies. The app has already been targeted, for example, by the Brazilian Association of Bars and Restaurants (Abrasel), which accuses iFood of charging abusive fees and demanding exclusivity from restaurants registered in its database.
According to a survey carried out by Abrasel, in September last year, iFood had 80% of the restaurants, while Uber Eats appeared with 24% and Rappi with 18%. The sum of shares exceeds 100% because some establishments work with more than one application.
In 2020, as part of this crossfire, a group formed by Abrasel and rivals such as Rappi and Uber Eats, filed a complaint with the Administrative Council for Economic Defense (Cade) focused precisely on the issue of exclusivity requirements in contracts maintained by iFood.
The complaint prompted an investigation by the agency, which is still ongoing, and which generated, among other consequences, the publication of a preventive measure preventing the application from signing new contracts in this way, in March 2021.
In an interview with NeoFeedin January of this year, Tijana Jankovic, CEO of Rappi in Brazil, spoke about the ongoing investigation at Cade, in addition to commenting on Uber Eats’ decision to leave the country.
“It is very sad to see a competitor, a fellow player, leave this market. It’s relevant news because it’s not a small player coming out, it’s a well-established global player making a decision like this,” he pointed out. “They’re not in this fight with Cade anymore, but we’ll keep going.”
In the midst of this dispute, this Friday’s announcement renews iFood’s breath, by showing Prosus’ confidence in the operation. And the new investment gains even more importance within the context of some recent movements by the Dutch group.
At the end of June of this year, Prosus and its parent company Naspers announced a share buyback program financed by an “orderly sale” in the capital markets of the shares of Tencent, the Chinese giant that owns applications such as WeChat and in which the group owns. a share of 28.9%, valued at the time at US$ 134 billion.
With the decision to dispose of its participation in Tencent, Prosus has, in practice, broken a “promise”. In April 2021, the holding company pocketed US$14.6 billion by selling part of its shares in the company and committed not to carry out new operations in this direction until 2024.
In the announcement made in June, the company also said that it raised about US$ 3.67 billion from the sale of its stake in JD.com, an online retailer and Alibaba’s main competitor in the Great Wall country.
Currently, Prosus has more than 80 companies in its portfolio, in segments such as finance, tourism, education and social media. This package includes operations such as OLX, an online classifieds company, and Udemy, an American online education platform.
The company’s shares were trading with a slight drop of 0.05% on the Amsterdam Stock Exchange this Friday, around 2 pm (local time). Prosus is valued at €160.5 billion.