Prosus CEO Defends Offer for Just Eat Takeaway

Key Concepts

Strategic partnership, M&A (Mergers and Acquisitions), food delivery, ride-hailing, ecosystem approach, Latin America, India, Europe, regulatory approval, data sharing, revenue sharing, lifestyle e-commerce, adjacencies, high-frequency business, shareholder complaint, premium.

Strategic Partnership vs. M&A: The Uber Deal

The speaker discusses the strategic partnership with Uber in Brazil instead of pursuing an M&A. The rationale is that Uber didn't have full delivery capabilities, and iFood lacked ride-hailing. The partnership allows iFood to integrate Uber's ride-hailing service into its platform, and Uber to integrate iFood's delivery service, offering a more comprehensive service to customers. This is presented as a better way to serve both iFood and Uber customers.

Mechanics of the Uber Deal

The Uber deal is a commercial partnership, not a merger, so it doesn't require regulatory approval. iFood customers will have access to Uber, and Uber customers will have access to iFood. There is no revenue sharing; iFood keeps delivery revenue, and Uber keeps ride-hailing revenue. The focus is on offering combined services to customers in Brazil.

iFood's Performance and Innovation

The speaker highlights iFood's strong performance, exceeding forecasts by over 10%. They are investing heavily in a large commerce model that consolidates transactional information to train the model and improve customer service. This involves using AI models to advance in e-commerce. iFood is described as a "lifestyle e-commerce" platform.

Ecosystem Approach and Key Focus Areas

iFood is focusing on building ecosystems in three key regions:

• Latin America: Integrating food delivery, payments, travel, and events.
• India: Combining Swiggy (food delivery), payments (BillDesk and PayU), and other companies like Meesho and Urban Company.
• Europe: Building on the acquisition of Just Eat Takeaway (pending regulatory approval). The goal is to invest ten times more in Europe once the acquisition is approved.

Just Eat Takeaway Acquisition and Shareholder Concerns

The speaker addresses a shareholder complaint regarding the acquisition of Just Eat Takeaway. The complaint alleges that the offer of €20.30 is significantly undervalued. The speaker expresses confidence in the offer, stating that it represents a 55-60% premium over the previous price. They anticipate closing the deal and believe it's an "amazing offer" for shareholders.

Future Expansion and Goals

The speaker hints at future deals in Latin America, Asia, and Europe. The goal is to become the biggest tech company outside the US and China and reach a valuation of $200 billion quickly.

Key Quotes

• "We think we can serve much better our customers, not only our customers, but Uber customers working together. I think that's the future offering more to our users." (Regarding the Uber partnership)
• "This deal specifically is about offering more services to our customers so we're not sharing revenue." (Explaining the revenue model of the Uber deal)
• "Europe needs big tech in Europe now." (Highlighting the strategic importance of the European market)

Technical Terms and Concepts

• M&A (Mergers and Acquisitions): The consolidation of companies or assets through various types of financial transactions.
• Strategic Partnership: A collaborative agreement between two or more parties to achieve mutually beneficial goals.
• Ecosystem: A network of interconnected services and businesses that create a comprehensive user experience.
• Adjacencies: Related or complementary products or services that can be added to an existing business.
• High-Frequency Business: A business where customers make purchases frequently, such as food delivery.

Synthesis/Conclusion

The speaker outlines iFood's strategic direction, emphasizing partnerships, ecosystem development, and geographic expansion. The Uber partnership exemplifies a strategic approach to service integration without requiring a full merger. The company is focused on building comprehensive ecosystems in Latin America, India, and Europe, leveraging acquisitions and partnerships to offer a wider range of services to customers. Despite shareholder concerns regarding the Just Eat Takeaway acquisition, iFood remains confident in its growth trajectory and aims to become a leading global tech company.