Maxi Mobility has raised $160m from investors including SoftBank’s Japanese rival Rakuten, as the Spanish start-up behind ride-hailing app Cabify braces itself against intense competition in its biggest Latin American markets.
The investment values the business at $1.4bn and will be used to bolster Cabify and Easy Taxi, Maxi Mobility’s peer-to-peer transport service, in the company’s battle against the much larger Uber and other car-hailing rivals.
Rakuten, the ecommerce group that has also invested in Uber’s US rival Lyft, is a fierce competitor of SoftBank, which this month became Uber’s biggest shareholder after a $9.3bn investment.
This time Rakuten will invest in Maxi Mobility alongside The Venture City, Endeavor Catalyst and GAT Investments, among others.
According to Juan de Antonio, chief executive, the money will be used to improve operations in existing markets. This will include investing in security features and trialling a new epayment system for passengers without bank accounts.
“We are already recognised for being different because of the safety and quality in our network, which means when you get on a Cabify, the driver has been filtered and trained by our own employees,” he said. “No one [else] is really investing there — we are the ones investing there.”
The fundraising comes just weeks after Didi Chuxing, the Chinese car-booking group, acquired Brazilian car-booking app 99, upping the stakes in Latin America’s largest economy and one of the world’s biggest car-booking markets.
Uber has 17m users and 500,000 drivers in Brazil, making the country its second-largest market outside the US, while 99 has 14m users and 300,000 drivers in the country.
Cabify trails far behind with 3m users and an undisclosed number of drivers. Globally it has 13m users in Latin America, Spain and Portugal.
Competition has kept prices low in Brazil, while discounts and subsidies are common as ride-hailing companies fight for market share. Adding to pressures, local politicians have said they are still willing to regulate car-booking apps as forms of public transportation.
However, according to Mr Antonio, Maxi Mobility maintains itself near financial break-even, setting it apart from rivals such as Uber, which hit $1.5bn of losses in the third quarter of 2017.
“Maxi Mobility has done an excellent job in balancing a high level of growth with unparalleled financial discipline in this industry,” said Laura González-Estéfani, chief executive of TheVentureCity.
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