Originating in Russia and now based in the U.S., InDrive is strategically targeting startups in regions where it has a strong presence. These regions include Latin America, the Middle East, Africa, Southeast Asia, and Central Asia. The company has recently launched a new venture and merger and acquisition division called New Ventures, aiming to invest up to $100mn in startups within emerging markets over the next few years.
The expansion comes on the heels of InDrive's successful launch in its first U.S. market in South Florida, marking a significant step toward profitability for the company. Recognizing the current economic climate, Andries Smit, Vice President of New Ventures, pointed out that normalizing valuations presents an opportune moment for InDrive to invest in startups, adding diversity to its ecosystem.
"We need to add value to those businesses as much as they add value to us, and therefore the biggest leverage is in the markets we're already in with some significance," said Smit. InDrive aims to support local businesses in breaking into new markets, emphasizing its interest in both investing and potentially acquiring promising startups.
InDrive's investment strategy is broad, covering both vertical and horizontal sectors within the ride-hail industry. The company is looking to invest in startups with adjacencies to ride-hail, such as delivery services, and exploring horizontals like fintech or insurtech to address specific challenges faced by its audience of drivers and passengers.
The $100mn investment won't come from a specific fund but will be allocated annually from InDrive's balance sheet, starting in 2024. Smit clarified that the funding source will be a combination of cash flow generated from operations and capital received in the past.
InDrive's New Ventures unit aims to provide capital to post-seed/Series A-stage companies demonstrating substantial year-over-year growth. The company emphasizes healthy economics and cash flow in its portfolio companies, focusing on efficiency across various metrics.
Andries Smit, who took over the New Ventures unit in October, brings a wealth of experience from leadership roles in major corporations like Morgan Stanley and Aviva, as well as contributions to building ventures as a partner at Stryber.
In addition to ride-hailing, InDrive, which raised $150mn in a Series C round in 2021, is actively expanding its product offering to include intercity transportation, freight delivery, task assistance, courier delivery, and employment search. The New Ventures unit aims to facilitate the scaling of portfolio and acquired companies across InDrive's extensive ride-hailing platform, leveraging its technology and reaching over 200 million active customers across more than 45 markets and 700 cities.
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