The Spain’s first billion-dollar start-up is now profitable

Cabify, the car-booking service that became Spain’s first billion-dollar start-up in 2018, says it is now profitable — a development it claims is a first for a standalone company in its industry. The milestone comes at a time when investors are becoming less tolerant of heavily lossmaking companies in industries such as ecommerce, booking cars and food delivery, after Uber’s lacklustre initial public offering last year. Madrid-based Cabify, which is also active in 10 Latin American countries, marked up a small profit of $3 million in earnings before interest, tax, depreciation and amortisation for the fourth quarter of last year. Cabify reported net sales of $29 million for the quarter and $104 million for 2019 as a whole, from a total of $708 million in rides. It added that its turn towards profitability was largely because of technology that allowed it to use discounts and subsidies more effectively… Cabify’s big investors include Japan’s Rakuten, with 40 per cent of the shares, and Spain’s Seaya, with about 10 per cent. Employees… retain about 25 per cent. The company, founded in 2011, says it is the market leader in Spain; its other principal markets include Peru, Chile and Argentina. It says it differentiates itself through features such as providing free WiFi, extra security measures and carbon offsetting. 

Daniel Dombey