Amazon Invests $25M in Colombian Delivery Service Rappi to Compete with MercadoLibre

Amazon has invested $25M in Colombian delivery service Rappi, aiming to compete with MercadoLibre in Latin America. Rappi is a well-known last-mile delivery company that will help Amazon expand its reach in the region. The investment is seen as a strategic move by Amazon to strengthen its position in the e-commerce market.

Amazon.com Inc. has announced a strategic investment in Rappi Inc., a leading last-mile delivery company based in Colombia. The investment, amounting to $25 million, is part of Amazon's broader strategy to enhance its presence in the Latin American e-commerce market, particularly in competition with MercadoLibre Inc. [1]

Rappi, founded in 2015, has become a ubiquitous presence in Latin America, offering services such as rapid delivery of goods and restaurant food, and financial services including digital wallets and savings accounts. Amazon's investment provides Rappi with access to Amazon's logistics and cloud-computing networks, potentially boosting Rappi's operational efficiency and growth prospects. In return, Amazon gains access to Rappi's extensive delivery network, which spans from Mexico to Chile. This partnership could significantly enhance Amazon's ability to compete with MercadoLibre, the dominant e-commerce player in the region. [1]

The $25 million investment is structured as a convertible note, which allows Amazon to acquire up to 12% of Rappi through warrants if certain milestones are met. This deal is part of Amazon's strategy of using warrants to invest in partners whose fortunes could be boosted by Amazon's growth. [1]

Rappi's co-founder and CEO, Simón Borrero, has indicated that the company could go public in 2025, potentially in New York. This move aligns with Amazon's long-term goal of expanding its e-commerce footprint in Latin America and leveraging local partnerships to achieve this. [1]

MercadoLibre, the leading e-commerce and fintech company in Latin America, has seen significant growth in recent years. With a presence in 18 countries and a market cap of about $123 billion, MercadoLibre continues to dominate the regional market. However, the rapid growth of the Latin American e-commerce market presents opportunities for other players, including Amazon and Rappi. [2]

The Latin American e-commerce market is projected to grow at an average rate of almost 11% per year through 2033, driven by consumer spending and economic expansion. This growth presents a significant opportunity for both Amazon and MercadoLibre to expand their market share. [2]

Amazon's investment in Rappi is part of a broader strategy to strengthen its position in the e-commerce market globally. By leveraging local partnerships and infrastructure, Amazon aims to compete effectively with established players like MercadoLibre. [1]

References:
[1] https://www.bloomberg.com/news/articles/2025-09-08/amazon-buys-stake-in-latin-american-delivery-startup-rappi
[2] https://www.aol.com/invest-amazon-latin-america-104500419.html