December 15, 2010
Car sharing services Zipcar has announced earlier today that it raised $21 million in a Series G round which was led by Meritech Capital Partners that offered a $20 million investment and Pinnache Ventures that contributed with $1 million. This founding round was before the company even going public, delaying this action even longer. The financing has come as a surprise due to the fact that it has already raised $59 million until the present moment and filed for $75 million IPO early in the summer.
Zipcar was founded in 2000, it is based in Cambridge, Massachusetts and it is the leader on the car sharing service market, having more than half a million of members and 8,000 cars in the college campuses and urban areas all over the Unites States of America, Canada and the United Kingdom.
The company did not disclose the reasons and the direction of where the money from this last round of funding will go to, but it is known that the companyâ€™s officials intend to use this funding for the capital needs, pay our debt, finance the fleet expansion, and also continue with its geographic growth.
Zipcar revealed to the press that co founder, former CEO and chairman at AOL, Steve Case, and Vice-chairman and CFO for Staples, John Mahoney, joined the companyâ€™s board of directors, as a consequence to the investment round. Steve Case said that â€œSince my original investment in 2005, I have believed that car sharing will revolutionize urban transportation and redefine how we think about mobilityâ€. Pinnacle Ventures was another participant on the financing made for Zipcar so far. The company has other venture capitalists on its list of prominent investors and among its biggest shareholders include Lighthouse Capital Partners VI L.P. Zipcar has reached to nine board members up to this date.
The company offers self service vehicles by the hour or by the day for people who are looking for alternatives to costly car ownership. Zipcar has never had a profit, but has had a loss of $14.5 million in 2007 and 2008, about $4.5 million in 2009 and no less than $5 million this year. Although, the revenues of this company have increased steadily, making around $58 million in 2007, $84 million and $131 million in 2009. Recently, Zipcar acquired a stake in Avancar, a Spanish car sharing service and in 2007 bought Flexcar, an American rival. Zepcar officials themselves explained that a $30 million debt, as the company had early this spring as being â€œsubstantialâ€ and due to the acquisition of another competitor, but on the English market, Streetcar.