Sebastian Mejia - Mastering On-Demand Convenience - [Founder’s Field Guide, EP. 44]

**Patrick O'Shaughnessy** (0:00)
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Hello and welcome everyone. I'm Patrick O'Shaughnessy and this is Founder's Field Guide. Founder's Field Guide is a series of conversations with founders, CEOs, and operators building great businesses. I believe we are all builders in our own way and this series is dedicated to stories and lessons from builders of all types.
Founder's Field Guide is part of the Colossus family of podcasts and you can access all of our podcasts including edited transcripts, show notes, and resources to keep learning at joincolossus.com.

**SPEAKER_2** (1:29)
Patrick O'Shaughnessy is the CEO of O'Shaughnessy Asset Management. All opinions expressed by Patrick and podcast guests are solely their own opinions and do not reflect the opinion of O'Shaughnessy Asset Management. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions.
Clients of O'Shaughnessy Asset Management may maintain positions in the securities discussed in this podcast.

**Patrick O'Shaughnessy** (1:54)
My guest today is Sebastian Mejia, co-founder and president of Rappi.
Founded in Bogota, Colombia in 2015, Rappi set out to create an on-demand convenience store and has expanded into nine countries and over 200 cities.
In our conversation, Sebastian and I discussed what differentiates Rappi from US-based delivery apps, how the company evolved early by understanding their customers' behavior, and how the business balances growth versus unit economics. I loved hearing Sebastian's views on the value of brands in an increasingly app-based world, the importance of being hyper-local for any delivery-based business, and how fungibility is a key characteristic of any rewards program. I hope you enjoy this great conversation with Sebastian Mejia. Before we transition to the episode, I also wanted to highlight our newest series, Business Breakdowns. Each week, we do a deep dive into an individual business to understand what makes it tick. Find more information on joincolossus.com or search for and sign up to the Business Breakdowns feed on your preferred podcast player. So, Sebastian, I think the right place to begin our conversation is to level set the audience on what Rappi does and the scope and scale of the business, which obviously is changing very quickly, which is good for you and your partners. But give us just a sense of what the business does today, what customers you touch and where and how they use the platform.

**Sebastian Mejia** (3:13)
Now, imagine that you have a product that allows you to have anything delivered in minutes.
We are operating across the region, focusing Latin America. Today we're talking about nine markets, roughly 200 cities. And in each of those cities, we go very deep zone by zone. And in each neighborhood, we allow customers to basically access Rappi as a way to solve their day-to-day needs.
A bulk of the business that we do is focused on restaurants and also several categories in the consumer product goods business. But we also deliver other types of categories inside retail. What you need to understand in terms of scale is that Latin America is the fastest growing e-commerce market in the world, but it's probably one of the most under-penetrated. And that's even after COVID and all of the fast acceleration of the movie in terms of technological adoption, we're still really, really under-penetrated. So the way you build the future of e-commerce is by creating products that allow you to have this very fast delivery. I'm talking about 10 to 30 minutes and a flexible courier network that allows you to actually deliver all sorts of different products in each of the cities that you operate. And that is basically a product that allows you to have a very, very high engagement, a product that allows you to have the mind share of the customer, a product that allows you to have this expansion of the LTV, of the users, and just a superior business model in terms of the advantages of how you have a long term relationship with the user. And it turns out to be a product that customers use with a really high frequency and as part of their core life. It's hard to understand how you would live your life in these cities. You're talking about very dysfunctional challenging cities without a product like Rappi.