iFood Nabs $2.6M from Movile, Companies Look to Take Just Eat to Lunch

Movile, a Latin American mobile entertainment company, announced today that it is investing $2.6 million in Brazil’s GrubHub-like iFood for its Series B round. The home delivery and online food ordering startup originally launched in 2011 and later raised $1.56 million from Warehouse Investimentos for its Series A. The company will look to use the funding to scale its existing partner network of 1,000 restaurants, for which it has helped generate almost $10 million in revenues, to 5,000 by 2014.

CEO Felipe Fioravante worked in management consulting before coming together with friends to launch iFood. He spoke with BetaKit about how the startup initially launched as a web service before recognizing the growth in mobile, a trend which prompted the startup to seek outside funding to build out its mobile platform. He also noted the benefits of now being backed by Movile, a company with portfolio solutions across mobile payments, entertainment, and marketing services, with eight offices in Latin America and a presence in Silicon Valley.

“We started the company over a year ago mostly as a web-based platform for food ordering like Seamless or GrubHub that you have there. After a while we decided to launch a mobile app just so our customers could have another way to use our product. The results took us by surprise, we were impressed by the numbers, and in a couple of months the mobile channel reached 20 percent of our sales,” said Fioravante in an interview. “And we realized that the company should be more of a mobile company than a web company. At that point we were looking for new investors and Movile came around.”

In addition to providing iFood the necessary funding to scale, Movile will act a strategic partner to expand iFood across Latin America. Currently iFood has a presence in major cities like São Paulo and Rio de Janeiro and across five Brazilian states. Users of its iOS or Android app can quickly scan menus and prices, place orders, and complete purchases to have food delivered directly to their location, with iFood taking 10 percent of each transaction.

The biggest threat to the starup’s plans to reach $50 million in revenue by 2014 is London-based Just Eat, which acquired RestauranteWeb in 2011 to access its network of restaurants in Brazil, and raised $64 million in 2012 for global expansion and $49 million the year before that. On a smaller scale, another startup that it goes head-to-head with is Peixe Urbano, although its online deals go beyond the realm of ordering food. On a global scale the company competes with Just Eat, GrubHub, Seamless, and Delivery Hero, though today news came that Just Eat’s longtime CEO has departed, which could mean a larger management shakeup at the company.

iFood users can expect revamped and updated mobile and web apps and greater selection if everything goes according to plan. With Movile’s financial and strategic backing, iFood may just have the momentum to take on online food ordering giants like Just Eat, however it will be up to local restaurants to determine who they want to partner with, so iFood will have to prove that they have the local edge, and look to expansion in 2013 in order to create a presence outside Brazil.

Humayun Khan

Humayun Khan

Humayun Khan is a Senior Writer and Analyst at BetaKit. A marketing graduate with honors, Humayun's work experience spans the fields of consumer behaviour with noted contributions in an academic paper published in the Journal of Consumer Psychology and market research consulting having coordinated projects for a major financial services client at Decode Inc. More recently he was involved in business strategy as a Business Analyst for an equipment rental outlet and prior in the National Marketing Department at Ernst & Young LLP. He is passionate about emerging and disrupting technology and its ability to transform and create entirely new industries.

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