Cabify Raises $110M to Fund Growth in Spain, Latin America; Remains Mute on Valuation

The Spain-based ride-sharing app didn’t disclose if its valuation was up, down, or flat, in a scenario where Carta data shows that every stage beyond Series A had down median valuations compared to 2021

Courtesy/Cabify
March 28, 2023 | 05:19 PM

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Bloomberg Línea — Spain-based ride-sharing app Cabify said it has raised $110 million in funding from Orilla Asset Management, an investment company owned by billionaire Francisco Riberas’ family, and AXIS, through Fond-ICO Next Tech, among other investors.

The Uber rival didn’t disclose its valuation, nor would say if the fresh cash was at a flat, higher, or lower valuation.

The company said the new investors join the investments already made by Mutua Madrileña in July 2022 and a loan of 40 million euros from the European Investment Bank.

At a time when both equity and debt are getting more difficult for startups, privately held tech companies need to receive down rounds or either opt to be acquired by bigger companies.

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While fewer rounds are being completed at every stage, Carta data shows that median pre-money seed-stage valuations are up 37.9% in the last quarter of 2022 from the first quarter of 2021, while Series A is just about even with the first quarter of 2021 figures.

But for every stage beyond Series A, the scenario is a 14% decrease for Series B, a 44.7% decrease in Series C, and to Series D the median valuation has been cut nearly in half compared to the first quarter of 2021.

Cabify said the new funding will help it grow in the countries where it is present: Argentina, Chile, Colombia, Spain, Mexico, Peru, and Uruguay. Cabify departed Brazil in June 2021.

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The company also said that the funds will go towards the electrification of the fleet in Spain and Latin America, as it pledged to EIB and as part of its technological innovation strategy.

The company said it is “accelerating profitable growth in Spain and Latin America”.

Profitability has been the keyword for unicorns in Latin America in recent months, as Brazilian companies Loft, Creditas and Facily set deadlines to reach breakeven by December 2023. Unicorn founders’ mindset has been ‘achieve a profit, then go public’, as founder and CEO of Creditas Sergio Furio told Bloomberg Línea.

Brazilian PicPay, for instance, recently reported its first profit and said it has IPO preparedness for when the window opens again.

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Cabify said in a press statement that over the past few years it has demonstrated its ability to generate its own resources and develop its business and mobility transformation plan with a focus on profitable growth.

As an estimated preview of its financial results, the company said its turnover in 2022 is already 24% higher than in 2019, and 32% higher than in 2021, but it didn’t provide the numbers.

Juan de Antonio, CEO of Cabify, said in a press statement that “the project is experiencing a stage of maturity and sustainable growth that is unique in its sector. Our goal is to accelerate our strategic plan, and, in the coming years, we expect Cabify to significantly increase in revenue volume and profitability.”

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Cabify plans to triple its revenues in the next three years.

The Madrid-based app said the fresh cash will increase its market share in the countries where it operates, and, among other projects, it will expand to more than 25 cities in Latin America and Spain.

Cabify’s expansion targets include cities with more than 200,000 inhabitants.

The company also said that at the end of 2022 and as a result of the closure of operations of the Beat platform in Latin America, Cabify closed a collaboration agreement with Beat to reference Cabify as a preferential mobility alternative for passengers and drivers.

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“The company’s new resources will enable it to maximize the impact of this partnership and further improve mobility in the region. In addition, the company will continue to invest in new business lines such as Cabify Logistics, the unit launched to transform the logistics needs of companies,” Cabify said.

The Spanish company has set the goal that all trips made on its platform will be in zero-emission vehicles in Spain by 2025 and in Latin America by 2030. In both regions, electrified mobility projects are being implemented through alliances with manufacturers and the activation of categories that only incorporate electrified vehicles, such as plug-in hybrids, and wholly electric vehicles.

The company says it has more than 1,000 employees in Spain and Latin America.