Prosus Buys The Rest of iFood

After a short break, Prosus is back to making deals. This time they have offered 1.5 billion Euros to buy out the 33.3% stake in iFood that they don't already own. iFood is the biggest food delivery company in Brazil with a market share of around 80%. They process 65 million orders a month from 300 000 restaurants. The business has real scale.

Like many of its rivals in the food delivery sector, it is losing money at the moment. They burned through 135 million Euros last year. But that is the nature of the industry at the moment. To offer a comprehensive service you need scale, so you need to spend a lot of money very quickly to squeeze out your rivals. You are basically subsiding the drivers and the consumers at the beginning.

Eventually, the maths will make sense. If you are doing 65 million deliveries a month and get a small cut every time, you will make money. And food delivery is a service that consumers really like and are happy to pay for.

I am also glad to see Prosus making deals during a downturn in the private market, hopefully getting better prices than last year.