SANTIAGO: Uber Technologies Inc is investing in a Chilean financial and technology firm that specialises in extending credit to buy motorbikes, marking the company’s latest expansion in the vehicle-lending business.
The US company is betting on Galgo, an eight-year-old firm that started off lending money to Venezuelan migrants in Chile, and has now tapped into soaring demand for motorbikes in Mexico and Colombia, as well as its smaller home market.
The Uber deal represents the largest single equity investment in Galgo’s history, co-founder and co-chief executive officer Sebastian Parot said in an interview in Santiago, without giving details. “The alliance will allow Galgo to double down on the gig-economy segment by jointly developing a product that gives cheaper credit exclusively for Uber delivery workers.”
Motorbikes represent a much larger share of the vehicle market in Latin America than in Europe or the United States, including 10s of thousands of bike-taxis that weave their way through the region’s notoriously congested traffic.
“Motorbikes are part of Latin American culture because they offer a practical solution for the 60% of the population that can’t afford a car,” Parot said. “A motorbike is both a tool for work and an affordable form of transportation, with monthly payments that people can manage.”
As such, Galgo sees itself as providing investment financing, enabling people to boost their wages, rather than just offering another form of consumer credit.
Motorbike sales grew around 19% last year in South America, excluding Brazil, with Colombia leading the trend, according to regional industry group Alianza MotoLatam.
“For 70% of the Latin American population, a car is prohibitively expensive,” Parot said. “Our company solves a tangible social problem: People who can’t work today are able to buy a motorbike and start earning an income.”
Galgo plans to expand into a fourth Latin American country in the first quarter of next year, Parot said in an interview in Santiago. He declined to say which.
Uber has been expanding its exposure to vehicle financing elsewhere, including through a 2024 investment in mobility fintech Moove as part of a US$100mil funding round that valued the company at US$750mil. — Bloomberg
