Cornershop is one of Latin America’s recent e-commerce successes. Long before COVID-19 led to a boom in online ordering, Cornershop allowed users to order and receive their groceries at home. But how did this app go from a three-person start-up to a multinational brand in five years?
Daniel Undurraga, Oskar Hjertonsson, and Juan Pablo Cuevas founded Cornershop in Chile in 2015 with just $500,000 in start-up capital. Cornershop was launched in Mexico and Chile simultaneously, but soon expanded across the Americas. In Canada, Cornershop launched through a partnership with Walmart, which was aggressively seeking a larger share of the Canadian grocery market.
Walmart made the first serious attempt to buy this app in July 2018 for $225M USD, a whopping 450-fold increase in value in three years. However, the deal soon fell apart after Mexican competition regulators blocked the sale. Mr. Hjertonsson took to Twitter to ask Cornershop customers to “keep calm and order even more avocados!”.
We suspect, however, that the founders were later grateful to those same meddlesome regulators. In October 2019, Uber announced they were acquiring a majority stake in Cornershop. The acquisition of Cornershop was estimated to be valued at $450M USD in cash and stocks and was one of the largest deals in the grocery e-commerce industry at the time.
As with many valuable start-ups, incumbents soon fought back. Cornershop’s main competitor in the North American market, Instacart, sued Cornershop for allegedly infringing on Instacart’s intellectual property rights. Cornershop does not own any issued patents or pending applications, which may put it at a growing disadvantage as it expands.
Latin America is becoming an increasingly competitive market for app development. However, this rapid rise in innovation must be accompanied by a prudent intellectual property strategy. Companies in Latin America should consider using every intellectual property tool possible to protect and broaden their market share in the global economy. For more information about creating an intellectual property strategy, please contact our team at Brion Raffoul.