Well, you have to hand it to the strategy team over at Zipcar. Arguably the largest on-demand car-sharing network, Zipcar went public last year and not long after saw its market cap cross $1 billion. It’s since fallen back, and with collaborative consumption and the market for car-sharing heating up, the big players have to make moves. Zipcar has since forged a partnership with Ford, making it the largest provider of cars for Zipcar’s University program, and, in December, the company took a controlling stake in Spain’s largest car-sharing network, Avancar.
Today finds Zipcar making another strategic move to get its mitts in fellow car-sharing companies, again with a focus on universities, whose students are among the most eager adopters of car-sharing models. What do I mean? The company today announced that it is a lead investor in the $13.7 million Series A financing of Wheelz, a junior, university-focused version of itself.
The Detroit-based Fontinalis Partners, a transportation technology investment firm, also participated in the round. As a result, Mark Schulz, the former President of International Operations at Ford and a founding Partner at Fontinalis, will join Zipcar CEO Scott Griffith on the startup’s Board of Directors. (Former Vice-chairman of Ernst & Young Jim Freer also joins the board.)
This adds to the $2 million in seed funding Wheelz raised pre-launch last summer, which was led by former Facebook VP and creator of the Social+Capital Partnership venture fund Chamath Palihaptiya, and included contributions from Felicis Ventures, Red Swan Ventures, and an impressive list of angel investors, including Freer and Sebastien de Halleux, the founder of Playfish. Wheelz’s total funding now sits just under $16 million.
For those unfamiliar with Wheelz, you can check out our coverage of their launch back in September. But, essentially, Wheelz aims to bring P2P car-sharing to campuses with a platform that enables students to connect safely and swiftly through Facebook integration, mobile apps, and its proprietary in-car hardware system called DriveBox. The startup initially launched at Stanford and has since popped up at UC Berkeley, USC and UCLA.
Among other things recommending it, Wheelz offers a wide selection of cars (sedans, hybrids, luxury cars, convertibles, vans, SUVs, and trucks), free, 24/7 customer support and roadside assistance, and users are protected by Wheelz’s million-dollar insurance policy, without affecting the individual’s own auto insurance.
As to how it works, once a student installs DriveBox in their car (for free), and has listed their car on Wheelz, other users can rent it, unlocking the car using the company’s iPhone app or Wheelz card. What’s cool is that the owner doesn’t have to be there to hand off the keys once they’ve agreed to sharing their car, as the company provides a “Key Box,” in which owners can leave their keys. The key box also comes with a gas card, so that when gas falls below a quarter of a tank, renters fill ‘er up using the card. The owner of the car decides how much the renter pays, setting hourly, daily, and weekly prices.
It’s a cool model, and one that looks to capitalize on the fact that on campus, P2P car sharing is on the rise. In a statement today, Zipcar CEO Scott Griffith said that he thinks P2P will have a big effect on the car-sharing market going forward: “We chose to make this investment because we believe that Wheelz has the right leadership, technology and business model to succeed in the emerging P2P space,” he said in a statement.
Wheelz does indeed have an experienced leadership team, as CEO Jeff Miller is a veteran of building sustainable transportation solutions, having worked for electric vehicle network provider Better Place. And co-founder and CTO Akhtar Jameel (also the architect of Wheelz’s technology platform) was formerly the CEO of Mercedes-Benz R&D and has held senior product and technology positions at Daimler, Better Place and Xerox PARC. (He was also awarded a Smithsonian Computer World Innovations gold medal for developing the world’s first Internet-connected car back in 1997.)
But what the Zipcar CEO didn’t mention was that there’s a lot of interest in the space, and competition is heating up. General Motors funded RelayRides in a very similar move and is offering its cars to the Google Ventures-backed startup to help it expand its reach, and, of course, there’s TechCrunch Disrupt winner GetAround, which has been getting a lot of buzz and has raised $5 million from a number of high-profile investors.
Again, it’s no surprise that Zipcar wants to tap into startups focusing on colleges and universities, something it’s done itself through its universities program. Campuses are early adopters and since a lot of students don’t own (or can’t afford) cars, they get used a lot more than they do in other places. Wheelz has a good-looking platform, some great technology, so the move makes a lot of sense. It will be interesting to see how the car-sharing tug-of-war plays out in 2012.
For more on Wheelz, check ‘em out at home here.