After positioning itself in delivery, transportation, and fintech services in El Salvador, Guatemala, Honduras, Nicaragua, Costa Rica, Dominican Republic, and Jamaica, it was announced that the German company Delivery Hero acquired Hugo’s operations for $150 million.
The acquisition is a strategic move by both companies to boost their growth in Central America.
“With the acquisition of Hugo’s food and grocery delivery verticals, we are also giving an additional boost to our trade operations locally,” detailed Niklas Östberg, CEO of Delivery Hero in a statement.
The regional super app
HugoApp, as it is officially called, was created in 2017 in El Salvador. It began to expand in early 2018, entering Costa Rica and Honduras. By 2019 it had a strong footprint in the rest of Central America and the Caribbean: Guatemala, Nicaragua, Dominican Republic, and Jamaica, reported Forbes Mexico.
By 2020, Hugo was the leader in most of this region, where it had 90% of the last-mile market. That is its strongest business line, but the company falls within the super-app category as it offers delivery, transportation, and financial services on its same platform.
Early on, it competed with Gourmet Express, a service where users called and ordered a pre-determined menu. Although its biggest competitor was Uber, it quickly managed to squash it within three months of its launch, reported Rest of World.
Alejandro Argumedo, Hugo’s CEO, told Rest of World that the company’s growth rate was taking it to the path towards becoming a unicorn. If Hugo became valued at over $100 billion, El Salvador could become a technology hub and attract investors that would motivate the country’s economic growth.
Although it did not reach such valuation, Argumedo was not wrong: Hugo did attract the attention of Delivery Hero, a German delivery company that has only invested in European companies of the same industry.
In fact, before acquiring Hugo’s operations, Delivery Hero invested $950 million in Gorillas, boosting that company to a $3 billion valuation.
As of today, Hugo has 800 employees and 1.3 million registered users in Central America.