InDrive, the ride-hail platform renowned in Latin America and Asia for its “bid-based” approach, has introduced a new initiative called New Ventures. This division, focused on venture and merger and acquisition activities, aims to invest up to $100 million in emerging market startups over the coming years.
The launch of the New Ventures arm follows InDrive’s entry into the U.S. market, particularly in south Florida, just four months ago. As InDrive strives for profitability, it views this move as an opportunity to diversify its revenue streams.
Andries Smit, Vice President of New Ventures, expressed optimism about the venture, citing favorable economic conditions where valuations have normalized, potentially making investments in startups more lucrative for InDrive.
Originating in Russia and now headquartered in the U.S., InDrive will concentrate its investment efforts on startups within regions where it already operates, including Latin America, the Middle East, Africa, Southeast Asia, and Central Asia.
Smit emphasized the importance of adding value to both InDrive and the startups it invests in, particularly in markets where InDrive holds a significant presence. He highlighted InDrive’s ability to assist local businesses in expanding into new markets.
The investment strategy will encompass both vertical and horizontal expansions from the ride-hail industry, with a focus on potential acquisitions or collaborations with targeted companies.
The primary areas of interest for investments include startups with adjacencies to ride-hail, such as delivery services, and horizontal sectors like fintech or insurtech that address specific challenges faced by InDrive’s drivers and passengers.
The $100 million investment will not be structured as a fund. Instead, InDrive plans to allocate capital annually from its balance sheet, starting in 2024. Smit clarified that the source of funds would be a combination of operational cash flow and capital received in the past, without specifying details from InDrive’s balance sheet.
The New Ventures unit aims to support post-seed/Series A-stage companies with robust year-over-year growth, exceeding 2-3x. It underscores the importance of healthy economics and cash flow in its portfolio companies, emphasizing efficiency across various metrics.
Smit, who assumed leadership of the New Ventures unit in October, brings extensive experience from strategic positions in both startup and corporate environments, including roles in business transformations, acquisitions, and integrations at major corporations like Morgan Stanley and Aviva.
In addition to its core ride-hailing service, InDrive, which raised $150 million in a Series C round in 2021, is expanding its product offerings to include intercity transportation, freight delivery, task assistance, courier delivery, and employment search. The New Ventures unit aims to facilitate rapid scaling for its portfolio and acquired companies by leveraging InDrive’s market expertise, technology, and a vast customer base across more than 45 markets and 700 cities.
