When we last checked in with peer-to-peer car rental startup RelayRides about six weeks ago, it had raised $25 million in Series B funding led by Canaan Partners. Well, it wasn’t quite finished raising money, as it turns out. The company just closed on an additional $10 million in financing led by Trinity Ventures.
For RelayRides, the decision to take more money so soon after its previous close came mainly as a result of continued interest on the part of investors. It brings total funding to $54 million, with other investors that include August Capital, Google Ventures, and Shasta Ventures.
The Trinity financing was led by general partner Patricia Nakache, although the firm won’t be taking a board seat along with the deal. (Fun side note: Trinity associate Phil Carter was previously first employee at Wheelz, a car-sharing startup that was acquired by RelayRides about a year ago.)
“When we were working on the Series B we received several term sheets, but decided to go with Canaan,” RelayRides CEO Andre Haddad told me last week. Still, the company continued to have a lot of interest from investors and decided that the additional funding would help it as it looks to expand.
“This increases our war chest and enables us to be even more aggressive,” Haddad said. The funding will be used for certain product improvements and launches, including the company’s plan to make a native Android app. It will also be used to fund continued geographic expansion of its service, as RelayRides looks to open up a physical presence at more airports around the country.
Today, RelayRides only has a physical location at just one airport, in its home market of San Francisco. But it’s definitely hoping to open up shop at other airports to offer the same type of concierge service that it has at SFO. And as it looks to do that, the company is also changing its pricing structure in an effort to make the idea of sharing their vehicles more attractive to consumers.
RelayRides is increasing the amount that it pays to those who make their cars available for rental. The company pays car owners based on the usage of the vehicle while it’s being used, and now those with luxury cars can make up to $0.40 per mile driven when rented out. Regular car owners can make up to $0.20 depending on how new their vehicle is.
On the rental side, meanwhile, it’s cutting the average daily price in half, as it seeks to drive more consumers to use its service. By doing so, cars start at about $10 a day, which it believes is the lowest price most consumers will be able to find — especially at the airport.
The combination of more money going to car owners on the platform and lower prices for consumers who wish to rent them is meant to help increase both supply and demand.
Airport car rentals are a $10 billion a year business, so there’s plenty of room for RelayRides to grow in that market. But it’s not alone: Y Combinator-backed startup FlightCar is also offering peer-to-peer rentals available at airports, and is currently in three markets.
You can expect RelayRides to move aggressively to new markets in the coming months, opening up lots where travelers can park their cars and rent them out. It’s part of the company’s larger strategy to extend the long-term rental part of its business, as it has moved from hourly rentals to focus on daily, weekly, and monthly rentals.
According to Haddad, offering the company’s valet service at SFO has increased the approval rate when users request a ride by up to 25 percent. Making it available in other places could help accelerate growth in those markets.