Madrid’s Uber competitor Cabify just secured a whopping $110M

In 2023, the intense competition between on-demand transportation and delivery startups to dominate urban consumer mobility has subsided, although some major players remain in the market. Cabify, a Madrid-based platform that competes with Uber in Spain and Latin America, announced that it has secured $110 million in funding. The company intends to use this funding to expand its technology, increase the number of electric vehicles in its fleet, and extend its existing footprint. Currently, Cabify operates in eight markets, including cities in Spain, Argentina, Chile, Colombia, Mexico, Peru, and Uruguay, with over 42 million registered users and 1.2 million drivers. The company plans to triple its revenue within the next three years and expand to 25 more urban centers with populations exceeding 200,000.

According to the company, the funding comprises a combination of equity and debt. Orilla Asset Management, the family office for Francisco Riberas, a major shareholder of the Spanish automotive manufacturing giant Gestamp, financial services giant AXIS (via its Fond-ICO Next Tech), and unnamed investors, provided the equity portion.

Unfortunately, the precise amount of new funding remains unclear. The $110 million includes a €40 million loan from the European Investment Bank announced in December 2022 and the proceeds from a funding round that Cabify secured in July 2022, which remains unconfirmed. Cabify declined to disclose its current valuation, but according to PitchBook, the company was valued at $1.49 billion following the July 2022 investment. However, it is worth noting that startups are under more pressure now than they were before due to a higher cost of capital. For instance, when Cabify raised $160 million in 2018, during a peak period for such large-scale funding rounds, its valuation was $1.4 billion.

PitchBook indicates that the company has a substantial cap table, with no fewer than 33 existing investors listed (in addition to 13 investors who have already sold their shares). Active backers include Rakuten, the Japanese e-commerce giant that has utilized Spain as the European hub for its operations, as well as Endeavor Capital and the Winkelvoss twins.

Cabify’s recent fundraising efforts highlight the fact that despite the regulatory landscape being less stringent than it was before and the lack of buzz among consumers as was the case pre-COVID, these transportation companies continue to expand and are raising funds in a challenging capital market to support their growth. Cabify has not disclosed its revenue figures or whether it is profitable in any of its markets or as a whole. However, it stated that it is experiencing growth.

In 2021, the company followed in the footsteps of Uber and other competitors in the market by expanding its services to include “multi-modal” options, such as subscriptions across various forms of transportation. It has also incorporated grocery deliveries into its app.

As a result of these efforts, Cabify’s revenues have increased significantly. According to the company, “turnover in 2022 is already 24% higher than in 2019, and 32% higher than in 2021.” Cabify also disclosed to me that its global turnover for 2021 was $518 million, indicating an estimated figure of $683.8 million for 2022. Despite this growth, 2021 revenue had yet to return to 2019 levels.

In a statement, Cabify CEO Juan de Antonio said, “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. 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 company’s electric vehicle strategy will be implemented in several phases, following its goal of making all trips zero-emission in Spain by 2025 and globally by 2030. Cabify plans to use the EIB loan, which was allocated for this purpose, to introduce 1,400 electric vehicles and charging stations in Spain.

Cabify plans to call for tenders this year to acquire vehicles and charging infrastructure, as part of its strategy to expand its own fleet, Vecttor. While Cabify primarily works with drivers who have their own vehicles, Vecttor, which is 95% “eco or zero” labeled, operates in several Spanish cities. Additionally, Cabify has partnered with Fenie Energia to promote the installation of recharging points throughout Spain, accelerating the electrification of vehicles for taxi and self-employed drivers that use Cabify. The partnership will offer drivers discounts to install charging points.