Thank you Glovo Latam

Finishing an intense week... I rarely write in public but I felt our team in Latam deserved a bigger recognition than the internal comms.

We announced on Wednesday the sale of our business in Latin America to Delivery Hero. The announcement first happened during the morning in a call with all the Latam team. It was a big, unexpected shock for everyone listening. So unfortunate that we could not do this face to face and be closer to our teammates. I sent right after an email to all Glovo team, which is copy-pasted in this post below, and then we announced it publicly. 

On Tuesday night, @Queralt Vallcorba sent me this quote from Andrena Sawyer, which I found very helpful for what we had to face to following day: “Courage is making an unpopular decision and suffering through temporary discomfort because you know it will have the best long-term results.” This is exactly how we, the management team, have felt during the last few weeks while finishing up the deal. The best decisions are the most difficult ones. 

The decision of selling Latam had a big emotional weight. Cashing out our most competitive region was the best decision for the company and it wasn't easy to accept it. This transaction sets Glovo for success, now with a clear focus on core and profitable markets and with a bigger war chest to invest in further leadership, new services, grow our tech team and expand geographically. I couldn’t feel more excited about our next few years. Glovo feels more solid than ever before and we finally count with good Tech resources and healthier margins to keep building things, optimize our impact to couriers and partners stores, and improve our service for all stakeholders. The industry is booming, with big growth expected (and challenges!) over the coming years with many new innovative startups popping up in the delivery space, which makes it all even more exciting.

Glovo Latam team: we are extremely proud and impressed for what you’ve built. In less than three years you’ve disrupted the industry in 8 markets and created one of the biggest exits in the region, while building the most amazing team in terms of passion, talent and team spirit we’ve ever seen in Glovo. Congrats. We will miss you. And confident that DeliveryHero will inherit what we’ve built and pump it enough resources so together you consolidate as the regional leader.

See below the email shared with the company:

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Dear team,

We have important news to share today. We have reached an agreement with DeliveryHero to sell Glovo’s operations in South and Central America. I’d like to tell you first about the details of the deal, then the Why, and finish with some words for the Latam team.

Deal:

The total price between the fix and variables is €230M. The deal is structured in two different operations:

• AR, PA, DO: in these three markets, where DeliveryHero already operates under the brand PedidosYa, there will be an asset sale and we will only transfer our user and partner base, and some other assets like darkstores. We will shut down our businesses in these markets in the following weeks. We will act with a people-first attitude and assist our teams as much as possible professionally and personally, and of course consider mobility options and outplacement services. All stakeholders in AR, PA, DO will get paid as usual (Glovers, Partners, other providers).
• EC, PE, CR, GT, HN and the Regional Team in Bogotá and Buenos Aires: full transfer of the business, including employees to the Delivery Hero group. We will keep operating these markets for two quarters (end of Q1-2021) and things will remain business as usual until then.

Why?

This is another difficult and emotional decision for us and we want to explain the rationale behind. We are focused on building a stand-alone company that can self sustain future growth and innovation for many years to come. Our strategy to achieve it is to have a portfolio of markets with strong leadership. In our industry, markets with high market share and strong brand awareness deliver better unit economics and more efficient growth. The higher the overall leadership across our markets, the bigger profit pools we will have to invest in what we most care about ==> positive impact & innovation. 

While in Latam we have some very healthy markets, we have faced an intense competitive scenario with many big players fighting for the same users and partners, which directly damages our profitability and growth health metrics. We don’t expect this competitive intensity to decrease in the coming years. Achieving leadership or high market shares in all of our Latam markets was unrealistic unless we significantly increased our investment in the region. 

We are confident we will build a larger, more solid and more sustainable Glovo if we focus in Europe and in the region we still call “EEMEA”. We will use the funds of this transaction to double down in these regions, investing in further growth and geographic expansion, developing faster our Groceries business, launching new initiatives and keep growing our Tech team. With this move, we will build not only a healthier Glovo short term, but also larger in the mid term. Our growth budget will be more efficient if invested in markets with stronger leadership.

Last but not least, we believe DeliveryHero is the right partner to take our business in Latam and build the leader in the region. DH is very experienced both on M&A and on the operational side. They are ambitious and with big investment power to lead the delivery space in the region. We are passing what we've built to the player with a clear winner project. There will be great career opportunities for a majority of our team in Latam. 

Latam team:

Expanding to Latam was our first big gas decision. We launched Latam around three years ago with almost no funding and no expansion experience. We were so immature as a company, with no expansion experience and with a product that wasn’t ready to scale. We sent Arnau alone, with his PC and a small luggage, and boom! The Latam team execution since then has been truly admirable.

You all should feel extremely proud for what has been built in less than three years in the region. Building a >€200M business from zero in Latam in such a short period of time doesn’t happen very often. Most startups don't make it and end up shutting down. You’ve built a service and a brand that most citizens in these markets recognize by today. You’ve been key in the creation of a new industry in Latam that now has a big economic impact in local couriers and stores. Proof of your amazing execution is the strong interest from a player like DeliveryHero. I’d highlight two things about our journey in Latam and our team there:

1. Your perseverance and capacity to fight fierce competitors with a lot (a lot!) more budget, a “more with less” mentality and never giving up. Scarcity makes teams smarter and you are a great example of it. You’ve been very autonomous and creative, and Glovo has learnt a lot from the region.
2. The regional culture, keeping a powerful level of passion, good vibes and humbleness during all the journey. Anyone that has travelled to Latam will agree that the office environment there had a special thing. 

While we are convinced this decision will be key to reach our vision, today is a very sad day for us. Digesting this decision hasn’t been easy for anyone at the management team. Latam is a region that we have suffered and enjoyed a lot and we will miss our team there. You’ve built a unique culture based on talent combined with strong passion, warmness and humbleness. It is very unfortunate that we can’t meet physically and talk face to face. 

The learnings during these years and profits generated in this transaction will be key for building the Glovo we all dream in, now with a clear focus in Europe+EEMEA. This transaction puts Glovo in its strongest moment since we started; with now a very clear geographic focus and leadership and a strong budget for the next two years. For those not staying with us, I really hope you have also enjoyed your time at Glovo and you come out of Glovo as a better professional and a better person.

I will hold two Q&A’s on Friday: one with LATAM from 4 to 5pm CET in spanish and one global with all employees from 5 to 6pm CET. You’ll receive the calendar invitation this afternoon with the Slido links included inside so that you can submit your questions. We’ll make sure to answer the most important one and we’ll open the Q&A feature during the zoom webinars too.

For all of this, THANK YOU Glovo Latam. 

Un fuerte abrazo,

Oscar