Transportation-on-demand service Lyft, now valued at over $15 billion after raising another $600 million in June, is on the hunt to scale its business. One move it might not be making soon, however, is to expand operations into Spain and Latin America by way of an acquisition of one of the leading players in the region.
Cabify says it “categorically denies” that it is in conversations with Lyft for a full or partial acquisition: the two were reported by Spanish newspaper El Confidencial (and subsequently reblogged by others) to be in negotiations, with Lyft preparing to pay up to $3 billion for the company, although the two might partner in future to provide services to each other’s customers in their respective footprints.
“We categorically deny the rumors about alleged conversations in relation to the sale of the company,” the company said in a written statement (in Spanish originally… see Spanish statement at the bottom of this post). “[Cabify] has not been meeting with managers of this or other companies to negotiate a possible partial or full sale of Cabify. The company is in an unbeatable state of financial health and sustainable growth, and continues to establish itself in a leading position in the markets in which it operates.
“As we have previously said, the company remains committed to a plan for an IPO in Spain, potentially in the next 12 to 24 months.” The company was last valued at $1.4 billion after a fundraise of $160 million earlier this year.
Cabify’s spokesperson further said that the two companies have not been meeting for any kind of negotiation, and would not comment on whether the two might work together on any kind of ridesharing partnership, whereby customers of Lyft, for example, could use the Cabify app when travelling in the 38 cities in Latin America, Spain and Portugal where it operates.
“We have nothing to state about that either,” she said. “If we have news in the future, I will for sure let you know.”
A spokesperson for Lyft said the company does not comment on rumor and speculation. An investor source close to the companies also called the report “false.” The Spanish publication that reported the news said it was standing by its report and said Cabify was “lying.”
A partnership between the two makes some sense, but might also be complicated, in equal measure.
On the one hand, the two companies share an investor, the Japanese e-commerce giant Rakuten; and they also share a common competitor, the ridesharing behemoth Uber, and tying up their services, so that their loyal customers do not revert to using Uber when travelling, makes a lot of sense, since once they start they might simply jump to Uber when back home, too.
(We have also reached out to Rakuten.)
On the other hand, one of Lyft’s investors, Didi, has acquired one of Cabify’s other big rivals in Latin America, 99, and so it makes less sense that Lyft would pursue a partnership that could increase business for a competitor of one of its biggest backers.
Then again, the current transportation market — bent as it is on finally becoming profitable after sustaining years of losses, built on collectively billions of VC dollars, to grow — is consolidating rapidly, and many of the fiercest rivals have suddenly started combining as a result. So anything can happen.
Lyft has raised more than ten times the amount of capital that Cabify has, respectively $4.9 billion versus around $407 million, and has yet to expand beyond its home market of the US. The company made some waves a couple of years ago when it announced a ridesharing partnership with Southeast Asia’s Grab, China’s Didi, and India’s Ola, nothing has really come of that deal to date, and now Grab is inching closer to an acquisition of Uber’s SEA business.
But Lyft clearly has its sights on expansion, one way or another. Just yesterday, my colleague Kristen reported that Lyft (along with Uber) was in acquisition talks with crowdsourced bus company Skedaddle.
En relación con las noticias publicadas sobre la posible venta de Cabify queremos afirmar lo siguiente:
• Desde Cabify desmentimos de manera categórica los rumores sobre supuestas conversaciones en relación a la venta de la compañía.
• No se han estado manteniendo encuentros con los directivos de esta ni de otras compañías para negociar una posible venta parcial o total de Cabify. La compañía se encuentra en un inmejorable estado de salud financiero y de crecimiento sostenible, y continúa estableciéndose en una posición de liderazgo en los mercados en los que tiene presencia.
• Como ya anticipamos, la compañía sigue comprometida con la hoja de ruta natural marcada, con la salida a bolsa en España en los próximos 12 o 24 meses como objetivo.