Mar 18, 2021 · 30m · 20vc
20VC: Rappi Founder Simón Borrero on Growth vs Profitability, Capital Efficiency, Raising $1.7Bn as a LATAM Company and Why Uber Eats Did More To Help Than To Hurt Rappi
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of 20VC, host Harry Stebbings interviews Simón Borrero, co-founder and CEO of Rappi, about building Latin America's premier multi-vertical super-app, cracking hyper-local unit economics, raising $1.7 billion in venture capital, and fostering a mission-driven company culture.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Harry holds 32.2% of the talking time here. How this is scored →
Harry as informed peer 4.0 Guest teaching 3.1 Guest disagreement 1.5 Harry pushing back 2.3
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 17:15 Dismissing outside critics of burn rate
Simon rejects the premise that Rappi's growth spending is reckless, dismissively addressing critics with 'No, dude, relax' and pointing to zone-level profitability.
Hardest push from Harry ▶ 16:03 Challenging growth vs. profitability transitionHarry refuses to accept pure growth focus, pressing Simon on when a high-growth company must explicitly shift focus toward unit economics and profitability.
Biggest teaching moment ▶ 10:42 Educating host on LATAM labor dynamics vs EuropeSimon corrects Harry's assumption about courier supply shortages by explaining how high underemployment and double-minimum-wage earnings make driver recruitment effortless in LATAM compared to Europe.
Harry holds his own ▶ 7:39 Host citing Sequoia investor insights on GMV vs frequencyHarry demonstrates VC expertise by invoking Sequoia partner Alfred Lin's view that chasing GMV creates bad behaviors, pushing Simon to define Rappi's true North Star metric.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| The Founding Story of Rappi and Early Growth Hacks | 3 | 2 | 1 | 1 | Harry opens with standard background questions about Rappi's origins and early growth hacks like handing out donuts for downloads. Simon explains how listening to early users led them to expand beyond groceries into restaurants and pharmacy. | |
| Geographic Density and Unit Economics Strategy | 4 | 3 | 1 | 2 | Harry probes the mechanics of geographic density and unit economics, asking for specific metrics on breaking even per order. Simon explains that hyper-local network effects and achieving two deliveries per hour per driver are critical to cracking unit economics. | |
| Merchant Onboarding and Expanding the Super-App Offering | 5 | 3 | 1 | 2 | Harry demonstrates domain familiarity by citing Sequoia partner Alfred Lin's view on GMV as a dangerous vanity metric. Simon agrees, emphasizing usage frequency over GMV and describing how user requests organically drove expansion into services like cash delivery. | |
| Courier Supply Dynamics and Socioeconomic Impact in LATAM | 5 | 4 | 2 | 3 | Harry compares driver acquisition struggles in London to LATAM and asks about raising capital as a LATAM company. Simon reframes the driver issue by highlighting LATAM's high unemployment rate where drivers earn twice the minimum wage, and dismisses fundraising 'tips' in favor of raw growth numbers. | |
| Balancing Growth vs. Profitability and Zone Maturity | 5 | 4 | 2 | 4 | Harry challenges the growth-at-all-costs mindset, asking when a startup must pivot focus toward profitability. Simon reframes the issue using a coffee shop expansion analogy, pointing out that mature zones reach profitability in three and a half months and Rappi is globally unit-economic profitable. | |
| Navigating Competition and Personal Leadership Evolution | 4 | 4 | 2 | 3 | Harry asks how Simon analyzes competition like Uber Eats and whether he experiences personal self-doubt competing against Silicon Valley giants. Simon rejects the self-doubt premise, asserting that LATAM engineering talent is on par with Silicon Valley and noting Uber Eats actually forced Rappi to innovate faster. | |
| Fostering an Entrepreneurial Culture and Managing CEO Stress | 3 | 3 | 2 | 2 | Harry asks about attracting senior talent to LATAM and managing extreme CEO stress. Simon explains that talent is drawn to high-impact mission rather than perks like ping pong tables, and dismisses the concept of work-life balance stress in favor of high-energy commitment. | |
| Quick Fire Round and Rappi's Strategic Five-Year Vision | 3 | 2 | 1 | 1 | During the quick fire round, Harry asks about leadership inspirations and Rappi's strategic outlook. Simon outlines Rappi's five-year vision as a super-app focusing deeply on high-frequency power users across fintech, baby products, and pets rather than chasing low-margin discount seekers. |
Statements from this episode (19)
Borrero: Rappi acquired its first users by giving away donuts
“We had no users, so we had to go to the streets, and we actually started giving away donuts for downloads, and that's how we started to gain traction in a very small neighborhood in Bogota”
Borrero: Rappi asked investors for more money six weeks after launch
“After a month and a half of lunch, I was asking my investors to give me more money.”
Borrero: Delivery apps rely on hyper-local density over citywide coverage
“Because this business has hyper-local network effects. You need to make a specific user fall in love with your service, so that specific user in a specific neighborhood in Bogota or in Sao Paulo, she or he gives a shit if you have a 100,000 restaurants in othe…”
Borrero: Rappi achieves unit break-even at two deliveries per hour
“So for us in America, it's two. If you're doing two orders per hour, you're good.”
Borrero: Rappi's North Star metric is frequency of use
“For us, the key metric has been frequency of use. Yes, we're a multivertical app, and what makes Rappi amazing is to be able to really make your life better, not only with restaurants, but with pharmacy, with diapers, with liquors, with anything you want.”
Borrero: On-demand ATM cash delivery became 5% of Rappi's orders
“48 hours after reading that message, we implemented an on-demand ATM where users could order the equivalent to a hundred dollars or 200 dollars, and a courier will deliver the cash for them. Latin America, everyone uses cash. We would deliver cash for them in …”
Borrero: Rappi couriers earn twice the Latin American minimum wage
“And there's another very important point for Latin American, is that if you connect And do orders for an hour in wrapping. You'll earn, in average, twice the minimum wage of Latin America.”
Borrero: 70% of Colombians earn under two minimum wages per hour
“In countries like Colombia, 70% of the population, seven zero percent, earn less than two minimum wages per hour”
Borrero: Growth is the only metric early-stage venture investors care about
“You have to understand in what game you're playing, and this game is called growth, and what's important for early stage investors is, number one, growth, number two, growth, number three, growth, and that's it.”
Borrero: Rappi's dollar retention cohorts are twice as good as DoorDash's
“Our dollar retention is world-class. DoorDash just published their dollar retention cohorts. And are amazing. Rappies are twice as good as them because of the multivertical approach.”
Borrero: Aggressive growth is unsustainable until unit economics are cracked
“And it's growth, growth, growth when you've cracked unit economics. If you haven't cracked unit economics, it's unsustainable to scale. So you have to crack unit economics and then go as fast as you can, knowing that you're going to be burning a lot of money t…”
Borrero: Rappi reaches local zone maturity in three and a half months
“Yeah, it takes about three and a half months. It's not more than that.”
Borrero: Rappi is unit economic profitable across all nine operating countries
“To be clear, Rappi is unit economic profitable globally, so in nine countries that we operate, so it's not acceptable for us, and I think for anyone in this world now, To have negative unit economics.”
Borrero: Mexican and Colombian engineers equal Silicon Valley talent
“Our Mexican-Colombian engineers are at the same level as Silicon Valley guys, and the talent is there.”
Borrero: Latin America will produce many $100B tech companies
“It has shown that in Latin America, there's going to be a lot of other hundred billion dollar companies”
Borrero: Rappi employs 4,000 corporate staff and 150,000 active couriers
“But now I'm managing a team of 4000 people, a 150,000 couriers in the region.”
Borrero: Employees seeking work-life balance will not be happy at Rappi
“A normal human being that wants a bit more of balance in their life is not going to be super happy in Rappi.”
Borrero: Rappi will become a super-app with banking within five years
“In five years, Rappi is going to be this super app for people that don't have a lot of time and need Help with a lot of things, and RAP is going to be able to provide not only groceries and restaurants and pharmacy, but also everything for your pets, services,…”