InDrive launches ventures and M&A arm to invest $100M in startups across emerging markets

The “bid-based” ride-hailing platform InDrive, popular in Latin America and Asia, has announced a new venture and merger and acquisition branch called New Ventures to invest up to $100 million in firms inside emerging countries over the next several years.

InDrive entered its first market in the United States, in South Florida, four months before establishing a new venture arm. While InDrive works toward being profitable, the firm recognizes this as an opportunity to diversify its sources of revenue.

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According to statements made by Andries Smit, vice president of New Ventures, in an interview with TechCrunch, “we see great opportunities in different verticals across our ecosystem.” Smit mentioned that the time was appropriate since values had returned to normal in the present economic situation. This might make it more profitable for InDrive to invest in companies.

InDrive, a company founded in Russia and now has its headquarters in the United States, plans to focus on acquiring new businesses in geographic areas where it already has a presence. These regions include Latin America, the Middle East and Africa, Southeast Asia, and Central Asia.

According to Smit, “We need to add value to those businesses as much as they add value to us, and as a result, the biggest leverage is in the markets we’re already in with some significance.” Smit also mentioned that InDrive is in an excellent position to assist “local gems” in entering new markets.

“And in those cases, we are very interested in investing and potentially even acquiring,” added Smit. “And”

InDrive plans to make vertical and horizontal investments within the ride-hailing market, intending to either purchase or utilize the services of the businesses it invests in.

The first “bullseye” for possible investments would be businesses in industries adjacencies to ride-hailing, such as delivery, in which drivers may tap into an extra service. InDrive completed the acquisition of Master Delivery in May to broaden the scope of its products.

According to Smit, the second target is horizontals, such as finance and insurance. These are examples of technologies that can potentially solve a particular problem that InDrive’s audience of drivers and passengers may be experiencing.

The one hundred million dollars will not, strictly speaking, come from a fund. According to Smit, the intention is to invest “over the next several years by making annual allocations of investment capital from our balance sheet, beginning in 2024.” We will determine the size of the yearly allocations depending on the number of investment opportunities in our pipeline that satisfy our strict growth and scalability requirements and are congruent with our corporate goal.

According to what Smit has said, the money will come from a combination of cash flow generated from operations and capital received in the past. However, he won’t specify exactly where the money would come from on InDrive’s balance sheet. InDrive completed a debt fundraising round in February, which resulted in the company receiving $150 million from General Catalyst. TechCrunch has inquired as to whether or not the firm is still operating at a loss and whether or not it plans to raise further capital shortly.

The post-seed and Series A stage firms that can exhibit year-over-year solid growth greater than two to three times will get the majority of the cash the New Ventures section will provide. The venture arm also stresses how important it is for portfolio companies to have healthy economies and cash flows. The cost of acquiring a new client, the loan-to-value ratio, and the customer retention rate can all reveal these.

According to InDrive, its New Ventures branch will assist its portfolio firms and acquired companies expand swiftly across its primary ride-hailing platform. These companies will receive access to InDrive’s go-to-market expertise, technology, and more than 200 million active users in more than 45 markets and 700 cities.

After holding important positions in both a startup and a corporate context, Smit assumed leadership of the newly formed division in October. During his career, he has led several prominent organizations’ business transformations, acquisitions, and mergers, including Morgan Stanley and Aviva. In addition, Smit has worked as a partner at Stryber, a major strategic growth partner and independent corporate venture builder with operations in Europe, the Middle East, and the Asia-Pacific. In this capacity, Smit has helped in the establishment of new businesses.

inDrive is focused on expanding its product offering and providing ride-hailing services. In 2021, the company secured $150 million in a Series C round of funding from Insight Partners and General Catalyst with a valuation of $1.25 billion. The company’s services now include intercity transportation, freight delivery, task help, courier delivery, employment search, ride-hailing, and delivery of packages.

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