CEO of iFood: we will use the power of the brand to grow in other areas of the business

Bloomberg Línea — After consolidating its leadership in the restaurant delivery market, iFood invests in growth in other businesses such as deliveries to supermarkets, meal voucher services and loans to restaurants and other partnersaccording to the CEO Fabricio Bloisi in an interview for Bloomberg line.

The extension seeks to replicate iFood’s dominance on other fronts. One of them is the delivery of pharmaceutical products. Even without receiving the investment, which the company classifies as “significant,” the area currently has an income of 60 million reais ($12.3 million) per month, according to iFood.

The strategy is in line with the iFood decision it favors the Brazilian market and foregoes regional expansion in Latin America. Last year, the company decided to exit the business in Colombia and now operates only in Brazil.

“We only focus on Brazil because we have one of the most popular brands in the country with 50 million customers. “We believe we can expand in several areas,” said the CEO of iFood in an interview during the G4 Valley event organized by G4 Educação on Sunday (10) in São Paulo.

Bloisi said the plan is to use the iFood brand and customers to further grow in other areas, such as those being explored by fintechs. According to the CEO, the startup has already lent 500 million reais ($102 million) to restaurants.

The executive is one of the co-founders of Movile, the iFood holding company, which in turn is part of the Dutch Prosus group. In April 2019, he took over as CEO of the app.

Last year, Prosus acquired Just Eat’s remaining 33.3% stake in iFood for 1,500 million euros ($1,642 million) in cash plus an obligation to pay up to 300 million euros ($328.4 million) in the future. Effectively, the transaction valued iFood at $5.4 billion ($5.911 million), making it one of the most valuable startups in Latin America.

With the deal, Bloisi said he can now make business decisions about the direction of the delivery app with more autonomy. “(This) for me means more control over iFood. “Now I can take more risks in areas I’ve always wanted to explore,” he said.

“I’m at the stage where I’m investing more because I think we’ve just started. “We can have a much bigger impact not only on today’s grocery delivery market, but also on supermarkets and food stamps.”

The executive referred to the iFood Benefits business, which was launched in 2020 to offer companies through its platform meal vouchers and meal vouchers in partnership with registered restaurants.

In Brazil, the business competes with traditional companies and industry leaderssuch as Sodexo, Alelo and Ticket, in addition to startups such as the French company Swile, which is capitalized and committed to Brazil as its main market, and Caju Benefícios, among others.

In its latest balance sheet, Prosus said revenue from adjacent grocer iFood, which includes supermarket deliveries and fintech (which offers financial services to restaurants and payment solutions), was up 21% year-on-year. This figure reached $69 million in the semester ending September 30, 2023.

In turn, the region’s operating losses fell from $95 million to $91 million compared to the same period last year.

Total iFood sales for the same period reached $679 million, and operating profit rose 149% to $67 million.

iFood’s core restaurant delivery business grew 17% in local currency, excluding mergers and acquisitions. Total revenue from core business reached $610 million.

Profit from its core home delivery business rose 106% in local currency, excluding mergers and acquisitions, to a total of $114 million, the company said, thanks to operational efficiencies such as lower staffing costs and more targeted marketing.

iFood IPO

When asked about a possible IPO (initial public offering) of iFood, CEO Fabrício Bloisi said that An IPO is not planned, at least in the short term.

According to him, this decision allows the company to be more flexible in investment decisions and have more freedom. However, he did not rule out that he could enter the stock exchange in the future based on the decision of the board of directors.

This is the path taken by other companies operating in the overseas delivery segment.

In September, US delivery company Instacart raised $660 million in an IPO on the Nasdaq. Previously, companies such as DoorDash, as well as US and European rivals such as Delivery Hero, Just Eat and Deliveroo.

In the case of Europe, stock market performance has been plagued by headwinds in a period marked by high interest rates around the world, which particularly affect fast-growing companies.

These three companies (Delivery Hero, Just Eat and Deliveroo) have lost more than 75% of their market value since their peak in September 2021. BloombergNews. Today, they are trying to increase profitability, such as limiting aggressive promotions.

When asked about competitiveness in the Brazilian market, Bloisi emphasized the company’s strength in the country. He attributed iFood’s positive and growing operating performance to its focus on quality, customer service and innovation, noting that the team of more than 5,000 people is concentrated in Brazil.

“We must be proud of a Brazilian company that operates as one of the best in the world in our segment,” said Bloisi, pointing to the importance of operating in different periods of the economic cycle.

“Technology is not immune to these changes (In economics). Tech companies need to understand that during contraction phases is the time to work more efficiently,” said the CEO.

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