It’s 2023 and we’re years past the peak of monster fundraising for on-demand transportation and delivery startups engaged in highly competitive races with each other to dominate urban consumer mobility. But with many of the biggest and most tenacious players still on the market, those rounds aren’t completely gone. Today, Cabify – the Madrid-based platform that competes with Uber in Spain and Latin America – announces it has raised $110 million in funding – money 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 more than 42 million registered users and 1.2 million drivers in eight markets, including cities in Spain such as Madrid and Barcelona, as well as cities in Argentina, Chile, Colombia, Spain, Mexico, Peru and Uruguay. It says it plans to triple revenue over the next three years and expand to another 25 urban centers with more than 200,000 residents.
The financing announced today is a mix of equity and debt, the company tells me. The equity comes from Orilla Asset Management (the family office of Francisco Riberas, one of the largest shareholders of Gestamp, a Spanish automaker), the financial services company AXIS (through its Fond ICO Next Tech) and others not mentioned.
But we have no 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 proceeds from a 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 July 2022 investment valued the company at $1.49 billion, so that’s the last amount listed. But…for some context on that number – and an example of the pressure startups are currently under with a higher “cost of capital” than before – when Cabify raised $160 million in 2018 (a high water moment for that kind of outsized round of funding) , it had a valuation of $1.4 billion.
The company has a pretty big cap table under that figure: PitchBook lists no fewer than 33 current investors (plus another 13 who have cashed out). The list of active lenders includes Rakuten (the Japanese “Amazon” that has used Spain as a 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 these trucking companies to account as much as before, and consumers may not be whining about them as much as they were pre-Covid, they continue to grow, and specifically raise money here in a tight capital market to stay invest in their growth. Cabify does not disclose revenue figures, nor whether it is actually profitable in any single market or overall, but it said it is growing.
In 2021, the company followed the lead of Uber and others in the market with an expansion into offering “multimodal” services, specifically subscriptions for multiple modes of transportation; and it has also added grocery delivery to its app.
That too has resulted in growing revenues: Cabify notes that “sales in 2022 are already 24% higher than in 2019, and 32% higher than in 2021”. Those absolute numbers may not be very large. Coincidentally, the company’s latest financials published in PitchBook are for 2019, when it posted revenue of $2.94 million. That would mean revenue for 2022 is $3.65 million.
“This commitment from strategic investors is a recognition of Cabify’s positive impact and potential to continue to create long-term value for our investors and the cities in which we operate,” Cabify CEO Juan de Antonio said in a statement. “These are partners who share our vision for the sustainable mobility industry and will enable us to accelerate the execution of our strategic plan.”
The electric vehicle strategy will take place in a number of phases following a goal the company has set itself to be zero emissions in Spain by 2025 and globally by 2030. The EIB loan earmarked for this effort will be used to roll out 1,400 electric vehicles and charging stations in Spain. The latest on this front is a tender that the company will launch this year for the purchase of vehicles and charging infrastructure. (Cabify works with drivers who have their own vehicles, but it has also built its own fleet, Vecttor, which operates in Barcelona, Madrid, Valencia, Seville and Málaga, and is labeled 95% “eco or zero”. It also signed a deal with Fenie Energia, an independent retailer of electricity, gas and energy efficiency solutions, “to promote the installation and deployment of charging points across Spain to support the electrification of taxi drivers’ and self-employed drivers’ vehicles using Cabify. speed up.” That includes discounts for drivers to install charge points.