Car-Sharing Platform Turo Raises $250 Million From Media Company IAC
Mobility startup Turo, which allows private owners to rent their vehicles on its car-sharing platform, has raised $250 million in Series E funding from internet and media holding company, IAC (NASDAQ: IAC). The funding brings Turo's total equity raised to $470 million.
IAC said Wednesday the investment would make it the largest shareholder in Turo. This latest round of funding gives San Francisco-based Turo a valuation of over $1 billion. Turo said the fresh funds will help the company invest further in its growth and refining the customer experience.
IAC has a proven track record of investing in successful companies, including Ticketmaster, Expedia, Match Group, and ANGI Homeservices (parent of HomeAdvisor and Angie's List).
"We couldn't be more invigorated and ready to push Turo into the same stratosphere as these esteemed brands, and to work closely with our new strategic partners to grow the Turo brand and business to new heights." Turo wrote in a blog post.
IAC CEO Joey Levin, who will join Turo's board as a result of the move, said the company.
"Turo has incredible scale and is benefiting from clear network effects in a very large market where consumers want better, more tailored experiences — perfect for IAC," Levin said in a statement.
Turo was founded in 2010 as RelayRides, before changing its name to Turo in 2015. The carsharing concept was inspired by similar online peer-to-peer marketplaces such as lodging platform Airbnb. Turo is often referred to as the "Airbnb for cars."
Unlike traditional car-rental services, Turo does not own or maintain its fleet of vehicles. Instead it offers a platform where car owners can rent their cars to other Turo members at competitive rates compared to traditional car rental companies. Turo claims its platform reduces rental costs and offers customers more convenience by providing a wider variety of vehicles to choose from.
Using Turo's smartphone app, a Turo member can choose the make and model car and reserve it for a specific time slot in cluding hourly, daily and weekly. Turo takes 10 to 35 percent of rental income, depending on the insurance coverage it provides the car owner. A user can have the car delivered to their location for an additional fee, including to major airports.
Turo also helps customer who list their cars by suggesting a competitive rental price based on market value, location, time of year, and other data sets to maximize an owner's income and boost the listing's competitiveness. Owners can also opt to set their own daily price.
Turo is part of a new wave of mobility startups hoping to cash in on the expected decline of personal car ownership, especially in urban areas, where as people are ditching their cars and using on-demand ride-hailing services such as Uber and Lyft to get around.
Turo allows users to book a SUV for a few hours or a weekend trip. A user can rent a roomier SUV for the weekend, or a Tesla Model S for a night out on the town.
All vehicles listed on the platform are fully insured so renters are covered for any damage or accidents. People who rent their personal vehicle can also set a mileage limit for the rental period. Renters who exceed this limit are charged an additional per-mile fee.
The number of hosts and guests on Turo's platform has risen to over 10 million, with nearly 400,000 vehicles being shared worldwide.
Turo offers a wide variety of vehicles for rent. For example, customers can rent a Porsche Cayman or a more affordable Honda Civic.
Turo is also being recognized by car enthusiasts and potential buyers as a great way to experience an extended test drive of a particular make or model without the pressure or a car sales person.
For example, a Turo customer can rent a Porsche sportscar, full-size SUV, Tesla Model 3, or BMW model for the weekend to evaluate it before making a decision about leasing or buying one. Likewise, a Porsche enthusiast might choose to rent a late model 911 for a weekend road trip.
Turo is also promoting the use of electric vehicles on its platform. According to Turo CEO Andre Haddad, three of the top 11 most frequently booked models in 2018 were fully-electric vehicles. And the supply of and demand for EVs have grown 1.6 times faster than hybrid or internal combustion engine vehicles in 2018, with EV demand growing 1.5 times faster.
The most frequently booked electric models on Turo include the Tesla Model 3, Model S and Model X SUV, as well as the Toyota Prius.
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