After several years of building its business in San Francisco, peer-to-peer car rental startup Getaround is ready to make its marketplace available in more cities around the U.S. In preparation for that expansion, the company has raised $24 million in new funding led by strategic investor Cox Enterprises.
Getaround, which won TechCrunch’s Startup Battlefield a couple of years ago, operates a platform enabling car owners to make their vehicles available for rent to strangers. It’s kind of like an Airbnb for cars, letting people who don’t want to own them have access to vehicles on an hourly or daily basis.
Since raising its Series A round in 2012, the company has expanded operations in a couple of cities around the U.S., including Austin, Chicago, and San Diego. Recently, however, most of Getaround’s efforts has been spent refining its business model in San Francisco, where the company is headquartered and has the largest fleet of vehicles.
There Getaround has been aggressively pushing the ability to do on-demand hourly rentals, allowing users short-term access to vehicles with very little notice. The company has been installing a piece of hardware it calls Getaround Connect into cars on its platform, which enables keyless entry to vehicles through its mobile app and GPS tracking for easy access to rentals.
Thanks to the hardware, a car owner doesn’t have to accept a rental request when it comes in or hand off keys, which reduces friction in the rental process and increases availability of vehicles on the platform. It’s no surprise, then, that Getaround has been aggressively pushing hardware installations for new and existing car owners in San Francisco.
Owners who want the hardware pay $100 for installation and $20 a month for connectivity. That said, rental revenue more than makes up for the cost, and Getaround is guaranteeing $1,000 in rentals to anyone who gets the hardware installed.
As a result of that push, Getaround now has 600 cars available for on-demand rental in San Francisco according to co-founder Jessica Scorpio. That represents about 90 percent of its local fleet in its home market, and has led to a 10x increase in bookings, she said.
The on-demand model puts Getaround more in competition with hourly rental service Zipcar, as opposed to more traditional daily car rental chains. It also is a departure from local competitor RelayRides, which earlier this year killed its hourly rental option and has been moving to longer-term rentals that require key handoff between a car owner and renter.
Now that Getaround’s on-demand business is humming in San Francisco, the company is looking to make it available in more places around the U.S. That means building up its on-demand fleet in markets that include the East Bay, Portland, and Washington, D.C. over the coming months.
To help with its expansion, Getaround raised a Series B round of financing led by automotive group Cox Enterprises, which owns properties like AutoTrader, Kelley Blue Book and Mannheim Auctions. The round, which brings Getaround’s total funding to $40 million, also included existing investors Menlo Ventures, Triangle Peak Partners, and SOS Ventures
While the funding will provide Getaround with some much-needed capital (expansion and hardware are expensive, after all), Getaround also hopes to gain distribution with help from the auto conglomerate. Cox Automotive reaches 32 million auto consumers each month, which could give Getaround access to a large number of new customers.Featured Image: Ecotrust/Flickr UNDER A CC BY 2.0 LICENSE