Cabify says it aims to make mobility in cities more sustainable, for people to gain space for cars. That was the goal when he was born in 2011 and continues to be in 2020, according to its founder and CEO, Juan de Antonio, after becoming the first company in the sector to be profitable. In the beginning they had to change gear on occasion and now the first Spanish unicorn (company valued at more than 1,000 million) seeks to advance balancing growth and profitability and betting on technology and innovation.
Nine years after birth, Cabify, present in 11 countries, with more than 1,000 employees and a turnover of 104 million dollars in 2019, declared benefits for the first time, although not net. Specifically, an operating or ebitda result of three million dollars (2.7 million euros) in the last quarter of 2019. For the CEO, this means that the company is sustainable, which reinforces its independence and marks distances with its main competitors, Uber and Lyft, which continue to record huge losses.
For De Antonio, the reason for Cabify’s good health lies in the why and how. “We wanted cities to be more for people and not so much for vehicles,” he says of the first question. As for how, he believed that they should build a business structure with sustainability in mind, with “the will to create a company that could last over time.”
It didn’t take long to jump the puddle. In 2012 they entered three countries at once: Chile, Peru and Mexico. At that time, in Spain they could not work in collaboration with taxis and, says De Antonio, there were only about 600 VTC licenses. “In Latin America, the taxi industry was not as developed as in Europe and that allowed us to push the quality level and work with them, which led us to be very innovative from the beginning,” he says. With the regulatory change in Spain they were able to return and today their activity in the country accounts for around 40% of the total.
Having opted for international organic growth – and not based on buying other companies – is for Rosario Silva, Professor of Strategy at IE University, one of the fundamental pillars in Cabify’s career. “In addition, I believe that its growth has been much more focused than that of, for example, Uber, which has diversified a lot. They have focused on trying to make their main business model work,” he says by phone.
During the first three years they struggled to consolidate their presence in the main cities, being the first to enter many of them. But the company agonized at times and sought capital round after round. Antonio himself says with humility that the company almost died on more than one occasion. In 2014, the Spanish fund Seaya Ventures gave them oxygen in the form of 5.5 million dollars. Currently, the Spanish venture capital fund is one of the main investors of the company, with 10%, along with the Japanese Rakuten, which has 40%, and employees, who control 25%.
In 2018, after a round of financing in which it captured 160 million dollars, its valuation reached 1,400 million and Cabify became the first Spanish unicorn. Now, after entering into operational profitability, the company’s plans continue to orbit the values with which it was founded and to which the manager returns again and again. “Recently, we have added new options and we will continue to deepen them. The goal is that one day you will have all your mobility options at one point. We will also explore subscription models,” he says.
Cabify’s position in the future will pass, according to Alberto de Torres, ESIC academic director, for strengthening its mobility alternatives. “If you do not evolve towards an integral operator and you remain alone in the VTC, you will have a difficult time growing when global mobility dominates. In this sense I believe that Cabify is taking the right steps. In addition, it is very financially sound,” says the professor.
For De Antonio, technology development and innovation are fundamental, to which last year Cabify allocated more than 10% of its declared net income. They are experimenting with mobility in rural environments and among their wishes is to materialize their commitment to electric vehicles in Spain. “We believe there is a lot of growth ahead. And we want to balance it with profitability,” he says.
In the last year there has been much speculation with the IPO. “It may be a matter of life or death for another company, but we, being profitable, have the opportunity to see what makes the most sense.” He says that when the time comes, “it will be seen”, but if they opt for that path they would like to do it in Spain. Cabify, like Uber, has caused clashes with the taxi sector. In this conflict with different sides and weapons he had two open fronts: regulation and accusations of having an opaque taxation.
The company is headquartered in Delaware, a region in the United States that is not listed in tax havens, but in fact offers huge tax advantages. Delighted to discuss the issue, Antonio answers with a sharp “no” to the question of whether this benefits them fiscally. “The companies we have in different countries hang on a holding company in Spain. Above Spain there are only shareholders agglutinated in Delaware because their company law works best,” he says.
The core of Cabify’s business is the application in which users are connected with different companies and transport options. In recent years the business group has entered other companies, such as Movo and VTC electric scooters and scooters. In 2011 he settled in Delaware, says its founder, because all the capital they managed to attract was American. He says he remains there for a practical matter, since it facilitates the “management of investors.” He insists that all his income is declared in Spain, that they pay the taxes that correspond to them and that there is no tax benefit that can be applied to them or to investors.