Just Eat Holding has agreed to sell 33.3% stake in iFood, one of the biggest tech success stories in Latin America, to Naspers division Prosus. 

The global consumer internet group announced on Friday, 19 August that it had entered into an agreement to acquire the remaining third stake in the Brazilian food delivery company with the minority shareholder Just Eat Holding Limited for €1.5-billion (R25.55bn) in cash plus a contingent consideration of up to €300-million. 

The contingent consideration may become payable if the food delivery sector re-rates on a gross merchandise value and gross profit multiple basis over the next 12 months. As part of the transaction, Just Eat will also acquire, for no additional consideration, IF-JE Holdings BV’s 49% interest in El Cocinero a Cuerda SA, the holding company of Sindelantal, a food delivery business in Mexico, that ceased operations in December 2020.

The deal is expected to close in Q4 of 2022.

Prosus has been in talks to increase its stake in iFood since 2020, Bloomberg News reported at the time. Once completed, Prosus and its affiliate, Movile will fully own iFood.

Just Eat reportedly planned to use the proceeds of the sale to strengthen its balance sheet and repay debt as it looks for ways to cope with diminishing order growth this year. The Amsterdam-based company is also still pursuing a partial or full sale of its Grubhub business, according to Bloomberg. 

iFood, which currently operates in Brazil and Colombia, is a platform business which includes food delivery, grocery, quick commerce, and fintech.

Bob van Dijk, CEO of Prosus, says in a statement that iFood has performed “exceptionally well” since they first invested in the platform through Movile nearly a decade ago. “During this time Fabricio (Bloisi, founder of Movile) and team have built a world-class food delivery business. They have shaped the sector in Brazil, creating a platform that serves 330,000 restaurant partners, provides income opportunities for 200,000 delivery partners, and delivers approximately 70 million orders every month. 

“Increasing our stake to full ownership is a demonstration of our committed and disciplined approach to investment and reflects our confidence in the long-term potential of iFood. We are excited to continue to be a supportive and active partner for iFood as the company steps into its next phase of innovation and growth.”  

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In August last year, Movile, one of Latin America’s leading and longest-standing investors and growth accelerators for technology companies, announced it had received a BRL$1-billion ($200-million) investment from Prosus. It was the largest primary investment in a single round since Movile’s founding in 1998. At the time, Patrick Hruby, CEO of Movile said seeing the success of companies like iFood in Latin America has empowered other innovative founders to join the burgeoning tech ecosystem in the region. “Movile is committed to improving people’s lives in the region and beyond, and this includes supporting entrepreneurs, generating new jobs and bringing more practicality and convenience to consumers. With these new funds, we will continue to help quality founders to achieve their big ambitions to build the next success story in the region.”

In a company statement dated 2 August 2021, Prosus noted that online sales were soaring in Latin America, with e-commerce sales growing 36.7% in 2020, which demanded better logistics offerings. “In Brazil alone, online sales increased 66% in 2020, more than double the rate of growth in the US, according to Euromonitor, and is expected to increase 56% by the year 2024, according to Worldpay by FIS. Based on this growth, Movile will continue investing in logistics.”

The Amsterdam-based division of Naspers is a global consumer internet group and one of the largest technology investors in the world. It has invested in Movile since 2008 and is now its majority shareholder.

The investment was geared at expanding Movile’s companies, including iFood; MovilePay and Zoop, two of Brazil’s leading fintechs; as well as Mensajeros Urbanos, a Colombia logistics company that is rapidly expanding in Mexico and other LatAm countries. Movile also plans to invest in tech startups in Brazil and across Latin America.

Prosus has a strong track record of investing in, transforming and scaling food delivery businesses in some of the world’s highest-growth markets.

Larry Illg, CEO of Prosus Food, said the Brazilian food delivery sector has grown significantly over the past four years. “There is substantial opportunity for further expansion in both the restaurant food delivery business and through building out the platform in areas such as grocery and quick commerce. iFood has established itself as a technology leader in Brazil and its success places it among the most innovative food delivery companies across the globe. We are thrilled to be fully backing the company on its path to transform the entire food chain to better serve customers.”

Prosus has a primary listing on Euronext Amsterdam and secondary listings on the JSE and a2X Markets. BM