IDB Invest and Cabify sign a strategic alliance to boost social development in Latin America and the Caribbean
- This is IDB Invest’s first deal supporting digital business models that are impacting the urban transport sector, through the use of innovative financial products.
- IDB Invest’s financing, which includes funds mobilized from Blue like an Orange Sustainable Capital, allows Cabify to strengthen its presence in countries where it operates across the region promoting social and environmental benefits, gender equality, and financial inclusion of drivers, among others.
- This funding seeks to support several of the United Nations Sustainable Development Goals.
Lima, Peru—IDB Invest and Cabify announce their strategic alliance with the closing of a $70 million loan to support an innovative digital business model that is transforming the urban transport sector. The agreement has been signed within the framework of the panel of experts Challenges and Opportunities of the New Digital Economy to Promote Financial Inclusion and Social Security for Independent Professionals.
The financing will allow Cabify to reinforce its activity in favor of its smart cities agenda, reducing mobility costs and improving the lives of citizens. The operation, the first carried out by IDB Invest with a digital urban mobility business model company and structured through innovative financial products, will allow the IDB Group to play an important role in the evolution of the urban mobility sector in Latin America and the Caribbean.
Cabify is a relevant actor in the economic activation of groups with difficulty in finding jobs and is a promoter of the formal economy. Its digital model allows the traceability of operations and transactions and represents an opportunity to formalize the economy in Latin America, by reducing formalization costs and generating a business environment that is subject to taxes and strict compliance with regulatory and legal frameworks.
The use of the financing, which includes the mobilization of funds from Blue like an Orange Sustainable Capital, will focus on three main areas in which IDB Invest will participate through technical advice: the improvement of urban mobility, allowing Cabify to increase the options of services offered to consumers and businesses, the optimization of service quality and the promotion of innovation, with a plan to improve the employment conditions of drivers that increase their financial inclusion and help in obtaining social benefits.
This project reinforces the common goal of achieving more sustainable cities. The financing is in line with the Sustainable Development Goals and the 2030 Agenda, which Cabify has incorporated into its business objectives by adhering 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.
About IDB Invest
IDB Invest, the private sector institution of the Inter-American Development Bank (IDB) Group, is a multilateral development bank committed to supporting Latin America and the Caribbean businesses. It finances sustainable enterprises and projects to achieve financial results that maximize economic, social and environmental development for the region. With a current portfolio of $11.2 billion under management and 330 clients in 23 countries, IDB Invest works across sectors to provide innovative financial solutions and advisory services that meet the evolving demands of its clients.
About Blue like an Orange Sustainable Capital
Blue like an Orange Sustainable Capital seeks opportunities to lend to companies and projects that deliver both strong risk-adjusted returns and positive social impact in support of the UN's Sustainable Development Goals. Blue like an Orange Sustainable Capital focuses on sustainable infrastructure, agribusiness, healthcare, education and access to finance. Investors in our firm and/or advisors in our advisory committee include Ray Chambers (former Chairman of Wesray Capital), Henri de Castries (former Chairman and CEO of AXA and Chairman Europe and Special Advisor of General Atlantic), Emmanuel Faber (Chairman and CEO of Danone), Paul Polman (former CEO of Unilever) and Alejandro Santo Domingo (Chairman of the Santo Domingo Group), amongst others. Blue like an Orange Sustainable Capital strives for sustainable development outcomes to foster inclusive and sustainable growth without trade-off with respect to market level rates of financial returns. Blue like an Orange Sustainable Capital's founding partners are Bertrand Badré, Amer Baig, Suprotik Basu, Rashad Kaldany and Emmanuelle Yannakis.
A signatory of the UN Global Compact, Cabify connects private users and companies with the forms of transport that best suit their needs. Its main objective is to make cities a better place to live. For this, it seeks to improve traffic congestion by providing a safe and quality transport option through technology. In 2019, Cabify integrated its leadership team with Easy, both companies belonging to the Maxi Mobility holding, as well as integrated the "Taxi" (or "Economy") category into its platform. This strategic move advances Cabify's plan to build the leading Mobility as a Service platform in Latin America and Europe and ensures that Cabify provides more services to its driving partners, and allied taxi drivers, as well as more availability to its passengers. Founded in 2011, in Madrid, Cabify extended a few months later to Latin America, and it is currently present in Argentina, Brazil, Chile, Colombia, Ecuador, Spain, Mexico, Panama, Peru, Uruguay, Portugal and the Dominican Republic. It adapts its model to the more than 130 cities in which it operates. With an almost entirely Latin team, it stands out for betting on local talent, generating jobs in an industry that is being transformed by technology. Cabify, as part of its commitment to be a socially responsible company and in line with the Sustainable Development Goals, is the first MaaS in Latin America and Europe to offset 100% of the CO2 emissions generated by its operation.