Falabella, the Chilean retail giant with operations across Latin America, acquired Latin America eCommerce powerhouse Linio for $138M. Falabella has operations in Argentina, Brazil, Chile, Colombia, México, Perú and Uruguay and Linio has a similar footprint. Falabella, founded in 1889 and with 65,000 employees, is likely making this strategic acquisition to beef up their eCommerce and logistics business as Amazon begins to enter into the Latin American market.
Linio had previously received more than $230M in venture capital, so, although terms were not disclosed, founders and venture capitalists may not be receiving much of a return. Linio was backed by investors like Rocket Internet, Summit Partnership, LIV Capital, Northgate Capital, JP Morgan Chase, Kinnevik AB and more. While no Linio revenue numbers are public, estimates range between $100M-$200M.
This is another step forward for Latin America startups, as it marks one of the first times that a large, traditional, family owned business in Latin America is making a $100M+ technology acquisition. On the other hand, it also shows founders and investors the perils of raising hundreds of millions of dollars in a cash heavy, low margin business.
Falabella stock prices were down 4.5% in trading after the announcement.