Amazon has taken a bold step into Latin American e-commerce and delivery services by investing more than US$20 million in Rappi, the Colombian-born super app that has rapidly become a household name across the region. The move underscores Amazon’s growing ambition in Latin America, a market long seen as challenging due to logistical barriers, fragmented economies, and powerful local competitors.
The deal, confirmed this week by sources close to both companies, gives Amazon a minority stake in Rappi. While the investment is relatively small compared to Amazon’s massive global acquisitions, its symbolism is significant: one of the world’s largest technology companies is betting on a homegrown Latin American startup at a time when digital consumption in the region is booming.
Rappi’s rise and the regional stakes
Founded in Bogota in 2015 by Simon Borrero, Sebastian Mejia, and Felipe Villamarin, Rappi started as a grocery delivery app but quickly transformed into what many call a “super app.” Today, Rappi offers restaurant delivery, grocery shopping, financial services, travel bookings, and even cash withdrawals through its couriers. With operations in nine countries and more than 30 million users, the platform has become an essential tool for many middle-class households in cities from Mexico City to São Paulo, Brazil.
Rappi’s success lies in its ability to adapt to the complexities of Latin American markets. From navigating congested urban traffic to offering payment solutions for populations with limited access to credit cards, the app has carved out a niche by solving everyday obstacles. Its growth has been fueled by billions of dollars in venture capital funding, including backing from Japan’s SoftBank, which became one of its largest investors in 2019.
Yet despite its popularity, Rappi has struggled to achieve consistent profitability. The company faces heavy operational costs, regulatory scrutiny, and worker strikes over labor conditions. For Amazon, stepping in at this moment represents both a calculated risk and a strategic opportunity. By partnering with Rappi instead of building its own delivery infrastructure from scratch, Amazon gains immediate access to an established logistics network and millions of loyal customers.
“The region is ripe for digital expansion, but the barriers are real,” says Santiago Morales, a Bogota-based analyst of the tech sector. “Amazon knows it can’t simply copy-paste its U.S. model. Rappi already has the last-mile solutions and the local trust that Amazon needs.”
Amazon’s Latin American gamble
Amazon has long eyed Latin America but has treaded carefully compared to other global players. In Brazil, it launched its marketplace in 2012 and expanded into electronics and household goods, but it still trails behind local giants such as Mercado Libre. In Mexico, Amazon has grown steadily but continues to face tough competition and logistical hurdles in delivering beyond major urban centers.
Until now, Amazon’s presence in Colombia and other Andean countries has been minimal, largely limited to its web services division (AWS) and Kindle offerings. The Rappi investment changes that equation by giving Amazon a foothold in a region where consumer behavior is shifting rapidly toward online shopping and digital payments.
E-commerce in Latin America is projected to exceed $200 billion in annual sales by 2026, according to data from Statista. Much of that growth is driven by younger consumers accustomed to mobile-first solutions, as well as the pandemic-induced boom in delivery services. By aligning with Rappi, Amazon positions itself not just as an outsider entering the market but as a partner in the region’s digital transformation.
“This is less about immediate returns and more about planting a flag,” explains Patricia Lopez, a consultant on Latin American e-commerce trends. “Amazon is buying visibility, logistics, and cultural know-how, while Rappi gains the credibility of being tied to one of the world’s most valuable companies.”
The deal could also pave the way for future integrations. Analysts speculate that Amazon may eventually link its Prime membership program to Rappi’s delivery services or explore synergies between RappiPay, the app’s digital wallet, and Amazon’s vast ecosystem of online shopping and entertainment. While no official announcements have been made, the potential for collaboration looms large.
Amazon and Rappi face significant challenges ahead
Despite the optimism surrounding the investment, both Amazon and Rappi face significant challenges. Latin America remains a notoriously difficult environment for scaling digital businesses. Infrastructure gaps, fluctuating currencies, and regulatory uncertainties often complicate expansion plans. Moreover, Rappi’s business model has faced criticism for its treatment of delivery workers, many of whom operate as independent contractors without stable benefits.
In countries such as Colombia and Mexico, labor unions and government regulators have pressured Rappi to improve working conditions. Strikes and protests have periodically disrupted operations, raising questions about the sustainability of its gig economy structure. Amazon, no stranger to criticism over labor practices in its own warehouses, may find itself under greater scrutiny by aligning with a company already mired in labor disputes.
At the same time, competition is heating up. Mercado Libre, the Argentine e-commerce giant often dubbed the “Amazon of Latin America,” continues to dominate online shopping across the region. Other delivery apps such as Uber Eats and China’s Didi Food remain strong players in key markets. Amazon’s investment in Rappi will likely intensify this competition, sparking new alliances and price wars as companies vie for consumer loyalty.
Still, the potential upside is enormous. Latin America represents one of the last great frontiers for digital commerce, with millions of consumers yet to be fully integrated into online shopping ecosystems. By deepening ties with Rappi, Amazon is not only expanding its reach but also signaling confidence in the region’s long-term potential.
For Rappi, the deal offers more than just a cash injection. It provides validation at a time when venture capital funding has slowed, and global investors have grown more cautious about high-growth startups. With Amazon’s backing, Rappi gains not only financial stability but also the promise of technological collaboration and global expertise.
As Latin America’s digital economy accelerates, the Amazon-Rappi alliance could reshape how consumers shop, pay, and interact with technology in their daily lives. Whether it succeeds will depend on how well the two companies navigate the region’s complexities while balancing growth with responsibility.