Cabify secured US$70m in structured financing from IDB Invest and Blue Like an Orange Sustainable Capital to support responsible expansion within the region. This is IDB Invest’s first deal supporting digital business models that are impacting the urban transport sector.
(Press Release) IDB Invest and Blue like an Orange Sustainable Capital announced this week their structured financing to Cabify, a ride hailing company that provides mobility solutions to its users, with the closing of a $70 million loan to support an innovative digital business model that is transforming the urban transport sector. The financing will allow Cabify to reinforce its “smart cities agenda”, reducing mobility costs and improving the lives of citizens.
Cabify is an important actor to assist economic groups who might otherwise have difficulty finding jobs, and bringing them into the Latin American formal economy. Its digital model allows the traceability of operations and transactions by reducing friction through technology and generating a business environment that is subject to taxes and strict compliance with regulatory and legal frameworks.
Cabify, IDB Invest and Blue like an Orange believe that this transaction can have significant positive social impact, in addition to the employment generation benefits described above. For instance, indicators will be traced related to road safety and CO2 emissions, and a specific effort on female drivers and providing women with safe access to transportation have been adopted. Safety is a major issue in Latin America, with a special impact on women, who suffer harassment and other forms of intimidation when using various forms of transport. Cabify provides a safe complement to other transportation options especially relevant for women.
In addition to increasing access to affordable, reliable and safe transport to people in Latin American cities, the company aims to reduce carbon emissions through the reduction of the average age of the fleet of vehicles the company operates with; increase of the number of women among Cabify’s drivers; and improve the employment conditions of drivers including help in obtaining social benefits.
Specifically, the expected development outcome of this transaction supports five Sustainable Development Goals: SDG 3, Ensure healthy lives and promote well-being for all at all ages; SDG 5, Gender Equality; SDG 9, Industry, innovation and infrastructure; SDG 8, Decent work and economic growth; and SDG 11, Sustainable cities and communities.
Cabify has incorporated the SDGs and 2030 Agenda into its business objectives, and adheres to the United Nations Global Compact.
The investment, carried out by Blue like an Orange Sustainable Capital together with IDB Invest, is part of a framework agreement of co-financing between both institutions to catalyze private debt capital in companies in Latin America and the Caribbean and marks their second co-financing transaction announced in as many weeks.