Services Marketplaces in LATAM: Food, Rides, Home Services and More

Many services marketplaces in the United States have matured and arrived at a dominant, platform conglomerate state of operation. In South America, the market in many countries seems to be 3-5 years behind where the United States is in terms of dominant platform companies. This presents opportunities in up-and-coming marketplace categories, like in home services, and it also provides insights about more developed marketplace segments like food delivery and ride sharing.

This report analyzes the leading service marketplaces in South America in areas ranging from food delivery, ride sharing, travel & hospitality, home services and more. We examined the leading product marketplaces in South America here. We split up these platform types into separate reports since a service marketplace typically operates very differently than a product marketplace, as its consumers are connected to a service provider as opposed to a seller of products. 

Looking at the state of the market today, large incumbent enterprises have M&A opportunities in all of the areas covered except for ride sharing and food delivery. In more nascent categories, there are also build-from-scratch platform opportunities if incumbents act quickly.

Up and Coming South American Vertical: Home Services

In the US, Barry Diller’s IAC is well known for its conglomerate that encompasses several marketplace models. IAC owns Expedia, launched Tinder out of its labs program and, more recently, merged Home Advisor, Angie’s List and Handy to create a home service marketplace leader. Home Advisor, Get Ninjas and Angie’s List are 1.0 marketplaces: they act mostly as referral engines that connect consumers with contractors for various home improvement projects. It’s left up to the consumer and service provider to set the price and complete the transaction, often offline or outside of the platform. 

Handy, however, is a 2.0 marketplace: it goes “end to end” on the transaction. It handles payments, it standardizes the price that contractors bill and it handles the matchmaking for the consumer – removing as much friction as possible from booking a service. The 2.0 marketplaces put much more responsibility on the platform: it has to ensure a good price for great quality of labor. Not an easy feat, especially at scale.

In South America, there are a handful of early-stage service marketplaces providing contractors for the home. The different platforms vary based upon geography, pricing models and the range of services that can be booked.

One of the biggest challenges in any home services marketplaces, especially in South America, is  instilling trust in the consumer that the contractor coming to your house is properly vetted and suited for the job. Relative to the average United States consumer, the comfort level in South America lags in this area of letting a stranger into your household. We believe this problem can be overcome by providing sufficient screening and quality control on the supply side of the marketplace. Overcoming the fear of this in-person transaction risk is key to the success of these marketplaces. 

Mature Markets: Travel, Food and Rides

Despite these three categories having the most mature service marketplaces in South America, they still do not serve all the countries on the continent. And, as is the case for most of the services marketplaces in the US, these marketplaces are typically concentrated in major urban areas. Hence, they are relatively mature markets, but they have not blanketed all potential consumers.

Food delivery for prepared meals and ride sharing are two of the most mature service marketplace categories in South America. iFood and Rappi are the two big food delivery players in South America. iFood has raised about $600mm and in April 2020 merged with the Delivery Hero-controlled Domocilios. In the combined entity, iFood has a 51% stake and Delivery Hero 49%. This merger enables both companies to have a unified front against Rappi, which we covered in our previous report studying product marketplaces. Rappi has raised over $1bn and delivers food and other durable goods same-day – like a blend of Uber Eats and Instacart.


latam marketplace landscape - services

In ride sharing, the two largest, homegrown startups have both been acquired by foreign entities. Ride-sharing startup 99 was acquired by the Chinese conglomerate, Didi Chuxing. And Easy Taxi was acquired by European ride sharing platform Cabify.

Despegar, the leading travel and hospitality marketplace, raised over $350mm and went public in 2017. There are a couple smaller startup marketplaces trying to compete against Despegar that we also feature in this report.

Download the full report to learn more about the startups we featured as well as market insights on the region.

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