RelayRides, the six-year-old, San Francisco-based peer-to-peer car rental service, has just rebranded itself as Turo. The company is also announcing $47 million in Series C funding led by Kleiner Perkins Caufield & Byers.
The combined announcement is meant to grab attention. Turo doesn’t disclose the number of people using its platform or the number of cars currently available to renters. But the company says that 60 percent of its revenue now comes from out-of-town travelers who are renting the cars of people who are themselves flying out of town. And it wants to take the trend global, thus the name. CEO Andre Haddad says it evokes both “touring,” or, in Italian, “turismo.”
The shift makes sense. There are plenty of hassles involved in airport parking, from the typical drive to the far-flung lot to the big parking tab. Cars are also depreciating assets from which more owners could easily wring money.
Turo isn’t not alone in trying to capture people who are willing to hand over their car keys for a little more spending money. Among its other competitors are GetAround and Flightcar, a company whose major restructuring we wrote about last month.
Still, there are differences. Whereas GetAround rents cars by the hour or day, Turo requires a one-day minimum and says the average rental period is 5.5 days. Whereas Flightcar’s users never meet a car owner — cars are brought to renters via airport valets — Haddad says that connecting people directing is its “secret sauce. It helps people feel that they can trust one another more.”
Indeed, as with traditional car rental companies, Turo invites both car owner and renter to examine a car together, noting its mileage, how much gas is in the tank, and any preexisting damage to the vehicle. Haddad insists this is also an ideal opportunity for both sides to bond.
Haddad concedes that Turo is also testing valets as a “complementary” service at both SFO and LAX. Mostly, though, the 110-person company is focused on getting itself into foreign markets next year so it can better eat into the market share of traditional car rental giants like Enterprise, which did $18 billion in sales last year.
Its new funding should help with getting the word out — as well as with hiring. Though Turo says it has grown its user base 3.5 times over the previous year, it remains unprofitable off three revenue streams. It takes 25 percent from each rental from the car owners (who set their own price); it collects another 10 percent of the total trip price from those renting; and it garners money by charging users for additional insurance protection. (Haddad says 60 percent of renters opt-in for more coverage.)
Of course, if Haddad can help it, the company will be in the black before too long. “The global car rental market is almost $80 billion,” he notes. “We [in the U.S.] have $35 billion of that $80 billion, but the international piece is even bigger.”
Turo “isn’t announcing which markets we’re entering in 2016,” Haddad adds. “But we’ll be in a number of them” and “we’ll continue to consume capital while we [pursue] that multibillion-dollar opportunity.”
Turo has now raised roughly $101 million altogether, including from Canaan Partners, August Capital, Google Ventures and Shasta Ventures.
You can check out its new promotional video here:
[vimeo 144076317 w=500 h=212]