Cabify, the Spanish ride-hailing company, is to invest $20 million in its new logistics business unit.
The Madrid-headquartered company, which does most of its business in Latin America, has been expanding its lines of business in parcel deliveries and logistics in recent years, particularly since the pandemic.
Cabify Logistics will oversee the company’s storage and delivery functions for businesses and consumers.
According to the company it has 5,000 clients globally across its markets and has inked several deals with larger retailers like Mercado Libre as well as restaurants and is integrating with Shopify for sellers on that platform.
Vicente Pascual, vice president of Cabify Logistics, said the business unit will aim to carry out deliveries in 30 minutes or less.
“Being a service offered by Cabify has allowed us to gain the trust of thousands of companies that already know us for our ride-hailing service, which has been an important trigger for our growth,” Pascual said.
“Cabify is a consolidated brand in the multi-mobility market with more than 10 years of presence in Europe and Latin America. That strength has allowed us to exceed 500,000 deliveries within eight months of launching the service in 2020, five times faster than the time it took us in our beginnings to make the first 500,000 trips.”
The $20 million investment is aimed at bolstering this new business model for the company as it seeks to diversify its revenue streams that had traditionally relied on ride-hailing.
In its home city of Madrid, the company has opened one warehouse with a fleet of electric delivery vehicles. However the lion’s share of Cabify’s business is in Latin America with a particular focus on Colombia, Argentina, Peru, and Chile. The company exited the Brazilian market last year.
“We are betting heavily on Cabify Logistics and will invest in strengthening our technology and team. This line of business started with five people, and to date, there are already more than 50 of us, in addition to Cabify’s central resources,” Pascual added.
“We are reinforcing the team in the countries where we operate to scale the service we provide to our customers, and we will invest in strengthening our customer service center and its technology to accelerate our 24/7 multichannel service.”
In an interview earlier this year, Cabify’s chief executive Juan de Antonio said Covid-19 lockdowns had sent the company’s revenues from ride-hailing plummeting: “Back in March 2020, our revenues went almost to zero when we were in lockdown.”
This spurred the development of the delivery unit to diversify Cabify’s business and shield it from future shocks, he said.