You may not have heard of on-demand high-end car service Cabify, but since 2011 the Spanish startup has quietly been building out its presence in Spain and Latin America — as a competitor to Uber.
Today Cabify has closed an $8 million Series A, led by Seaya Ventures, to bolster its growth in LatAm — a region where it says it’s seeing a monthly growth rate of around 50%. It’s not, however, currently disclosing data on Cabify users or drivers. It will say it’s had more than 100,000 downloads of its apps globally since launch (more than 35,000 of which are in Spain).
Cabify’s apps allow users to order a chauffeur-driven car for immediate use or advanced booking, with payments taken via credit card or PayPal. The journey priced is fixed at the time of the booking, and vehicle types on offer to users include Executive (Mercedes Class E or Audi A6), Luxury (Mercedes Class S) and Group (Mercedes Viano minivans).
The startup previously raised a $4 million seed round from Belgian fund Emerge, and Angel investors sourced via AngelList. A series of unnamed Latin American investors also participated in its Series A round.
Cabify currently operates in Madrid, Barcelona, A Coruña, Malaga, Bilbao and Vitoria in Spain; and Lima, Santiago de Chile and Mexico City in LatAm. Spain is its biggest market but growth for the startup is accelerating fastest in LatAm.
As with Uber, Cabify’s focus is on providing an on-demand car service that offers a better class of vehicle than a typical taxi, so although it competes with the likes of MyTaxi and Hailo in Spain it’s proposition is more premium. In Europe, Cabify charges a minimum price per journey of €10.
In LatAm, Cabify co-founder Juan de Antonio says it competes with the likes of Easy Taxi, SaferTaxi and Uber. The latter has launched in six cities in the region (namely: Bogota, Mexico City, Cali, Panama City, Lima and Santiago).
Cabify plans to use its new funding to consolidate its position in its existing markets — and also expand its footprint, says de Antonio, mainly in South America. This includes hiring around 20 new employees.
“This round is mainly to consolidate our position in the markets where we are, in Spain, Mexico, Peru and Chile, and also to expand our operations to additional markets. We are mainly targeting the Latin American region, so we’ll be opening more markets there,” he told TechCrunch.
“Uber has been a late entrant to this market, so we are… competing with Uber but they are smaller,” added de Antonio, discussing the competitive landscape. “The main players in the region are SaferTaxi and Easy Taxi. Uber is not really a big player in Latin America although I guess they will start growing there.”
de Antonio said the regional opportunity in LatAm for an on-demand car service is massive when compared to markets in Europe. It’s also an easier region for startups to operate, owing to less regulation on taxi companies.
Cabify adapts its business to mesh with local transport regulations — so in some markets it has established long-term relationships and contracts with drivers, but in other regions de Antonio says that’s not necessary. It doesn’t own any of its fleet itself, though, either renting cars or using drivers who own the vehicles.
“Our biggest market is Spain but we are growing faster in Latin America,” he added. “You won’t believe the number of taxis in countries like Peru. In Madrid in Spain, for instance, there are around 17,000 taxis. And in Lima there are over 200,000 taxis — so you can get a feeling of what’s the size of the market.
“It’s also a very unregulated market, where taxis don’t even have meters. So the space we have to differentiate ourselves is much greater. That’s mainly the reason why we decided to focus our growth in Latin America. Because the taxi industry is not as standardised as it is in Europe.”
de Antonio said the main challenge for Cabify’s business now is keeping up with customer demand — or “ensuring vehicle liquidity”, as he puts it.
“The priority is to continue growing. The main challenge is having enough vehicles on the road. We’re working on that by establishing alliances with car manufacturers and financing companies,” he added.
Commenting on the funding round, Seaya Venture’s Michael Kleindl told TechCrunch: “We like the LatAm exposure of the company since this business model is ideal for this region.
