The firm says its funding expansion was driven by strong growth in Mexico, where transactions grew almost 10 times from Q2 2020 to Q2 2021. La Haus expects to achieve more than $1 billion in annualized gross sales by the end of the year. Selling more than 500 homes per month, La Haus claims it is the market leader in Spanish-speaking Latin America.

Also investing in this round are Jeff Bezos’ Bezos Expeditions, Endeavor Catalyst, Moore Strategic Ventures, Marc Benioff’s TIME Ventures, Rappi’s Simon Borrero, Maluma, and Gabriel Gilinski. Past investors also participating in this round include Greenspring Associates, Kaszek, NFX, Spencer Rascoff’s 75 & Sunny Ventures, Hadi Partovi and NuBank’s David Velez. Acrew Capital has also invested in past rounds.

La Haus was founded by Jerónimo Uribe, CEO; Rodrigo Sánchez-Ríos, president; Tomás Uribe, Chief Growth Officer; and Santiago Garcia, CTO. Jerónimo Uribe and Tomas Uribe met Sánchez-Ríos at Stanford University, and prior to La Haus they started and ran Jaguar Capital, a Colombian real estate development company with over $350 million of completed retail and residential projects. The Uribe brothers are sons of Colombia’s former President and current Senator Alvaro Uribe.

“We are so grateful that our international investors recognize the transformative impact La Haus is having on the unstructured residential markets of Latin America. We are tailoring our solutions specifically for the needs of Latam, bringing more transparency and higher productivity to the entire ecosystem,” said La Haus co-founder and President Rodrigo Sánchez-Ríos. “Today we are bringing the pride of quality home ownership to Latin Americans. Longer term, our vision is to change the social structure of all emerging markets, in Latin America and beyond.”

La Haus, active in Mexico and Colombia, claims partnerships with significant developers like Mexico-based Arquitectoma, GDC Desarrollos, CLASS, Punto Destino, Yukon, and Terraforma, who leverage La Haus’ platform and audience to enable online transactions.

“La Haus is building a solution specific to the issues of Latin America’s housing market — not importing solutions from the U.S.,” said Lauren Kolodny of Acrew Capital. “We were attracted to the team and the incredible opportunity ahead of La Haus. They have already become the number one platform in Mexico and Colombia, and this new capital will create a flywheel of supply and demand that will benefit both the business and society.”

Finance Colombia has reached out to Rappi’s founders for their side of the story. Should they respond we will provide an appropriate update.

Case number 4:2019cv07415 filed in the Northern District of California names Jorge Uribe, Jose David Mendoza, Mauricio Paba Serje and Jose David Mendoza Macanaz as plaintiffs against Rappi, Inc., RAPPI S.A.S. and Simon Borrero Posada. First reported in Colombian business daily Dinero, the plaintiffs allege that they hired Rappi founders to create an app called Kuiky (Spanish spelling that sounds like “quickie” in English). According to the plaintiffs, they contracted with Imaginamos, a software firm founded by Rappi’s Simón Borrero in 2015 to develop the application.

The effort faced several delays, then according to the lawsuit: “By this time, however, the Kuiky creators had grown increasingly concerned about the repeated delays by the Imaginamos team and the service they were receiving from Imaginamos. Because of these delays and concerns, the Kuiky creators decided to discontinue their relationship with Imaginamos and to try to develop the Kuiky app and business in a different way. The last email between the Imaginamos team and the Kuiky creators is from April 23, 2015, and Plaintiffs are informed and believe and on that basis allege that Rappi S.A.S. was incorporated only days later on April 27, 2015.”

Plaintiff’s lawyer Nathalie Lozano Blanco told Dinero “the defendants had access to all the information of the business; they took the idea and developed the Rappi business model.” According to Lozano, charges have also been filed with Colombia’s prosecutor general’s office for unauthorized use of privileged information, violation of trade secrets, and violation of “moral rights of the author” (similar to copyright violation), and unlawful enrichment.

More Troubles For The Unicorn

Last month, Colombia’s Superintendencia de Industria y Comercio (SIC), similar to the Federal Trade Commission in the US ruled that Rappi had breached an administrative order regarding the company’s terms and conditions offered consumers, and legal violations regarding pricing and disclosure, guarantees, and dispute resolution.

Evidently, there have been mounting consumer complaints against Rappi, with a backlog mounting in Colombia’s consumer protection bureau. According to the SIC:

The decision was taken after evaluating more than 750,000 requests and 117 complaints filed by RAPPI users before the Deputy Superintendence for Consumer Protection.

In addition to the above, the SIC took into consideration the total of 472 lawsuits that the Deputy Superintendence for Jurisdictional Matters met in the exercise of the consumer protection action, of which 108 are active.

The government threatened Rappi with a fine of up to 1,000 Colombian monthly minimum wages, or just under$250,000 USD.

According to the SIC, the charges against Rappi are:

1. Alleged breach of the order related to indicate to consumers the source of the right of withdrawal and reversion of payment.
2. Alleged non-compliance with the order to adjust the clauses of the terms and conditions.
3. Alleged breach of the order to report on its electronic commerce platforms, the total price of the products.
4. Alleged breach of the order to establish clearly, in the cooperation agreements concluded with their commercial allies, the responsibility of each of the subscribers of the agreement regarding the effectiveness of the guarantee.
5. The presumed partial breach of the order related to provide its customers with requests, complaints and claims (PQR) mechanisms in the e-commerce platforms.

Backed by Softbank, the same Japanese investment fund entangled in the WeWork financial drama, Rappi is laying off over 300 employees, or 6% of its workforce, according to Axios. Just last year, Rappi was hailed as a Latin American venture capital success story, with the largest ever technology financing raise by a Latin American startup.

It is too early to tell whether the lawsuit has merit, but clearly Rappi has growing pains, to say the least. A backlog of complaints may indicate growing consumer dissatisfaction, and these actions only include Colombia; not the 8 other countries where Rappi operates. Time will tell whether the company will endure in the long-term, or if these legal actions and layoffs are signs of structural weakness and indicate existential threats.

Photo credit Felipe Balduino from Pexels

Holberton provides what it calls “Silicon-Valley grade” peer-learning and project-based software engineering training in a 2-year curriculum and charges no upfront tuition. Students acquire practical skills and an understanding of theory through hands-on learning closely advised by mentors from US technology companies. Holbertson claims its students have been employed at top-tier employers like Apple, LinkedIn, Google, Amazon, and Tesla.

According to Simón Borrero, co-founder and CEO of Colombian Unicorn Rappi, Colombia lacks up to 200,000 software engineers, and as such Colombian government has announced that it is a priority to support the development of software talent to advance the digital transformation of the economy.

The school charges no upfront tuition. Instead, graduates are asked to contribute a percentage of their salaries to the school for the first three years of their post-Holberton employment, giving back to the next generation of software engineers.

“Our administration is on a deliberate path of a digital transformation of the economy, from manufacturing to ‘mindfacturing’ through the production and export of intellectual property. We are keenly aware that there is a deficit in software engineers and programmers, in Colombia and globally,” said Colombian President Ivan Duque. “Our priority is to reform education towards a digital economy, at all stages of education … supporting efforts of the software industry training software engineers around their needs with disruptive initiatives.”

“As the world becomes increasingly digital, Colombia stands at the cusp of a burgeoning opportunity,” said Victor Muñoz, Colombia CIO. “By working with a new generation of schools, we can efficiently train at scale the people of Colombia for the current and rapidly growing number of high-paying software jobs. With more talent, Colombia will be poised to attract more businesses to our country, a virtuous cycle fueling even greater job growth.”

Sylvain Kalache, co-founder of Holberton

The Bogota school, opened in January in partnership with Rappi, Colombia’s first startup valued at more than $1 billion, including a recent investment by Softbank. The school attracted more than 5,000 candidates for just 50 spots in the initial cohort. Rappi contributed to the opening costs and provided mentors to the students. It has also committed to hiring graduates from Holberton.

Coderise, a regional non-profit that empowers youth through software engineering education, is leading the efforts and operations of the school in Colombia.

“The future of LATAM is digital, and we are leading the revolution in Colombia. But this success will depend on available high-quality software engineering talent,” said Borrero. “The ability of Holberton to attract students of all genders, rich or poor, educated or not and to effectively train them on in-demand skills is exactly what’s needed.”

Medellín has experienced significant transformation over the last five years. It was named the most innovative city of the year In 2013, and it has become a hub of digital innovation in Latin America. Ruta N, the innovation agency of the city, along with Socialatom Ventures with a joint Digital Business Development Center, will support Holberton in Medellín.

“We started in 2016 in the city of San Francisco. After we expanded our school to the state of Connecticut, with support from the governor, we were flooded with inquiries from other cities, regions and even countries, all seeking a Holberton School,” said Sylvain Kalache, co-founder of Holberton. “Colombia’s digital growth is so impressive that they cannot currently train the required pool of software engineering talent fast enough. These new schools will enable Colombia to take a quantum leap into the Fourth Industrial Revolution and give so many of its citizens lasting skills and high-quality jobs.”

Holberton boasts a remarkably diverse student body. Its automated admission process reduces human bias, resulting in one of the most diverse learning institutions in the tech industry. The school charges no upfront tuition. Instead, graduates are asked to contribute a percentage of their salaries to the school for the first three years of their post-Holberton employment, giving back to the next generation of software engineers.

Applications to Holberton are open to people with any educational background and of any age or gender.

Founded in 2015, Rappi has emerged as the leading service app in the Latin American region, primarily offering on-demand shopping and home delivery of restaurant orders and products, including groceries across a range of categories, including medications and digital payment services. The investment will enhance Rappi’s presence in existing markets such as its home base of Colombia where it is ubiquitous in practically all urban areas and accelerate growth into additional markets throughout the Latin America, as well as into additional product and service areas.

“This is the result of very hard work by all members of our team which is absolutely committed to transforming the quality of life of Latin Americans. We will continue to invest in market-creating innovations to provide opportunities for millions in the region said Rappi co-founder and CEO Simon Borrero. “It is time for a technology-driven Latin America, and SoftBank’s support is essential to lead this transformation.”

Bolivian born Marcelo Claure, SoftBank Group’s Chief Operating Officer, CEO of SoftBank Group International and CEO of Innovation Fund, said, “Rappi’s founders have a bold vision to create the premiere multi-service ‘super-app’ for Latin America, improving the lives of millions in the region. In less than four years Rappi has become one of the fastest growing start-ups in Latin America. This rapid growth demonstrates the immense opportunity in the Latin American region. We are excited to be investing in this passionate team of entrepreneurs and believe Rappi will benefit from being a part of the greater SoftBank ecosystem.”

In 2018, Rappi expanded the number of products delivered by 700% and achieved 20% monthly growth in the seven countries where it operates. Additionally, Rappi was supported by Y Combinator in 2016 and reached unicorn status last year.

“SoftBank’s vision of accelerating the technology revolution deeply resonated with our mission of improving how people live through digital payments and a super-app for everything consumers need. We will continue to focus on building innovations for couriers, restaurants, retailers and start-ups that translate into new sources of growth,” said Sebastian Mejia, Co-Founder and President of Rappi.

In connection with the agreement, Jeffrey Housenbold will join the Rappi Board of Directors. SBG and the Vision Fund join existing Rappi investors DST Global, Delivery Hero, Sequoia Capital, Andreesen Horowitz and Y Combinator.

“We are investing ahead of an incredible long-term growth opportunity for Rappi. This rapidly-scaling company has the potential to expand far beyond its current business and become one of the most important technology companies in Latin America. By creatively addressing the unique market dynamics of the region, Rappi is building a robust technology platform of products and services designed to revolutionize the way consumers shop and live their lives, said Jeffrey Housenbold, managing partner at Softbank Investment Advisers.