It’s 2023, and we’re years past the peak of monster fundraising for on-demand transportation and delivery startups locked in highly competitive races with each other to dominate urban consumer mobility. But with many of the biggest and most tenacious players still in the market, those rounds have not disappeared altogether. Today, Cabify — the Madrid-based platform that competes against Uber in Spain and Latin America — is announcing that it has picked up $110 million in funding — money that it plans to use in part to expand in its existing footprint, to expand its technology stack, and to bring more electric vehicles into its fleet.
The company currently has over 42 million registered users and 1.2 million drivers across eight markets that include cities in Spain such as Madrid and Barcelona as well as cities in Argentina, Chile, Colombia, Spain, Mexico, Peru, and Uruguay. It says its plan is to triple revenues in the next three years while expanding to 25 more urban centers with populations of over 200,000.
The funding getting announced today is a mix of equity and debt, the company tells me. The equity comes from Orilla Asset Management (the family office for Francisco Riberas, who is one of the major shareholders of Gestamp, a Spanish automotive manufacturing giant), financial services giant AXIS (via its Fond-ICO Next Tech), and others that are not being named.
But we don’t have an idea of the exact amount of new funding: the $110 million also includes a €40 million loan from the European Investment Bank actually announced in December 2022, and it also includes the proceeds of funding round of an unconfirmed amount that Cabify secured in July 2022.
Cabify also did not respond to a question about its valuation. PitchBook notes that the investment in July 2022 valued the company at $1.49 billion, so that is the last stated amount. However… for some context on that number — and an example of the pressure that startups are under right now with a higher “cost of capital” than before — when Cabify raised $160 million back in 2018 (a high-water moment for those kinds of outsized funding rounds), it had a valuation of $1.4 billion.
The company has a pretty large cap table underneath that figure: PitchBook lists no less than 33 current investors (plus another 13 that have cashed out). The list of active backers include the likes of Rakuten (the Japanese “Amazon” that has used Spain as the home base for its European efforts), Endeavor Capital and the Winkelvoss twins.
Cabify’s fundraising underscores the fact that while regulators may not be holding as many of these transportation companies to account as they were previously, and consumers may not buzz about them as much as they did pre-Covid, they are continuing to grow, and specifically here are raising money in a tight capital market to continue investing in their growth. Cabify is not disclosing revenue numbers, nor whether it is actually profitable in any single market or overall, but it said that it is growing.
In 2021, the company followed the example of Uber and others in the market with an expansion into offering “multi-modal” services, specifically subscriptions across multiple forms of transportation; and it also added grocery deliveries to its app.
That has resulted in growing revenues, too: Cabify notes that “turnover in 2022 is already 24% higher than in 2019, and 32% higher than in 2021”. Those absolute figures, however, may not be very big. Tthe last financials for the company published in PitchBook happen to be for 2019, when it posted revenues of $2.94 million. That would mean 2022 revenues are $3.65 million.
“This commitment from strategic investors is a recognition of Cabify’s positive impact and potential to continue creating long-term value for our investors and the cities in which we operate,” said Juan de Antonio, CEO of Cabify, in a statement. “These are partners who share our vision for the sustainable mobility industry and will enable us to accelerate the delivery of our strategic plan.”
The electric vehicle strategy will come in a few phases that follow on from a goal the company set itself for all trips to become zero-emmission by 2025 in Spain and 2030 globally. The EIB loan, which was earmarked for this effort, is being used to roll out 1,400 electric vehicles and charging stations in Spain. The latest on this front is a call for tenders the company will make this year to acquire vehicles and charging infrastructure. (Cabify works with drivers who have their own vehicles, but it has also built out its own fleet, Vecttor, which operates in Barcelona, Madrid, Valencia, Sevilla y Málaga, and is 95% “eco or zero” labeled. It also signed a deal with Fenie Energia, an independent marketer of electricity, gas, and energy efficiency solutions, “to promote the installation and implementation of recharging points throughout Spain to accelerate the electrification of vehicles of taxi drivers and self-employed drivers that use Cabify.” That will include discounts to drivers to install charging points.