Velos Partners

Airport Car Rental Startup Silvercar Raises $14 Million From Eduardo Saverin And Velos Partners

Next Story

Instagram Begins Rolling Out Ads In UK

Silvercar is taking a bit of a contrarian approach to changing airport car rentals. The company, which launched in Dallas nearly two years ago, isn’t trying to make car rentals cheaper, but trying to make them better thanks to an awesome mobile app and generally higher-quality vehicles.

The company is now in five of the top six airport rental markets in the U.S., and it’s just raised a $14 million Series B Round of funding to help it expand to even more places. And it could open up in the future to create more of a platform for shared transportation services.

Silvercar differentiates by having a single type of car it rents out — the Audi A4 — and by simplifying the process of choosing, picking up, and returning vehicles. Thanks the to quality of vehicle and streamlined experience, the company charges a bit of a premium to what you might expect from a typical airport rental. Then again, a number of customers are willing to pay a little bit more for a better experience.

Unlike some other startups out there, Silvercar actually finances its own fleet, rather than relying on peer-to-peer rentals. That means it has a higher cost of entering new markets, but it also has more control over its own destiny. The company is now at eight airports in the U.S. and expects to be in 10 by the end of the year — that’s after adding three new markets over the last three months.

Silvercar has been helped in getting into new markets with a bit of a shift in strategy. The company started out by trying to get into airport Conracs — that is the rental bays where national brands like Alamo and National and Enterprise and Avis hang out. But now the company is much more open to opening facilities offsite and partnering with shuttle services to get customers to fleets near airport properties.

Then again, buying a fleet of Audis isn’t cheap. According to CEO Luke Schneider, the company has hundreds of Audis and will soon have thousands of Audis in its rental fleet. With the new funding it’s looking to increase the number of airports it can serve and double the number of markets it’s in to 20 cities around the U.S.

Due to its recent expansion, it’s seeing about 20 percent top-line growth month-over-month, and about 10,000 new customers each quarter. And it’s got pretty good retention for a service in a limited number of markets: About 40 percent of its customers use the service a second time.

With the latest funding, Velos Partners’ Raj Ganguly will join the Silvercar board. The company has raised $32 million since being founded in 2012, with other investors that includes Austin Ventures, CrunchFund, SV Angel, Chris Dixon, and Dave Morin’s Slow Ventures.