Ride-hailing service inDrive, which increased gross revenue 88% in 2022, raised $150M in debt from General Catalyst that links repayment to company performance
Jake Rudnitsky / Bloomberg :
Context & Ripple Effects
Ride-hailing companies built their scale on giant priced equity rounds — Lyft raised $500M at a $6.9B valuation back in 2017, part of a wave that included Drive.ai topping up with Grab money and sharing-network startup Drivezy chasing a $400M valuation. That playbook meant founders selling ownership to fund growth.
inDrive is running a different financing route: after growing gross revenue 88% in 2022, it took $150M of debt from General Catalyst with repayment tied to company performance rather than a fixed schedule. The structure lets a fast-growing operator borrow against its own trajectory without setting an equity price.
First-order effects
- inDrive gets $150M of non-dilutive growth capital, with the cost of funds scaling up or down alongside its revenue performance instead of fixed interest payments.
- General Catalyst gains direct upside exposure to a high-growth ride-hailing business without negotiating an equity valuation at a moment when late-stage pricing was under pressure.
Second-order effects
- Other high-growth mobility startups facing weaker equity markets now have a template: pitch revenue-linked debt to investment firms as an alternative to down-rounds.
- General Catalyst's move puts traditional venture capital in competition with structured lending for late-stage deals, forcing equity investors to justify dilution against a cheaper debt alternative.
Third-order effects
- If performance-linked deals become routine, the line between venture investor and lender blurs structurally — firms like General Catalyst allocate across both instruments, and late-stage startups fund growth off cash flow rather than successive priced rounds.
The trend: Late-stage startup financing is shifting from dilutive priced equity toward performance-linked debt issued by crossover firms, with fast-growing operators like inDrive trading repayment risk for ownership.