Fair nabs funding of around $50M, acquires rental car delivery service Skurt
Just a week after we reported that Fair was acquiring the leasing portfolio of Xchange Leasing from Uber, the flexible car-ownership startup is making two more moves. Today, the company confirmed that it has raised another round of funding led by next47, the VC firm backed by Siemens; and it has made another acquisition, of Los Angeles-based Skurt, a service that lets you rent a car, and then delivers that vehicle to you.
As part of the deal, Skurt’s existing service will be shut down and its technology and team will be integrated into Fair, Fairs’ CEO Scott Painter confirmed to TechCrunch. (More on Skurt below.)
Terms of both of the deals have not been disclosed. Sources close to the company say that Fair has now raised over $100 million in equity funding, which would put this latest round at around $50 million.
Fair has never officially specified exactly how much money it has raised or its valuation.
Last year, the company confirmed that it had arranged for equity and debt financing of up to $1 billion, money that it would use to build out its business organically and by way of acquisition. Since then, it also secured a loan facility from Goldman Sachs to finance the Xchange Leasing deal (with the amount also undisclosed).
From what I understand, there will be some more acquisitions, and funding rounds coming down the line from some key investors, as the company speeds up its national rollout, from its current business that is live only in California, in part to meet the Xchange Leasing deal.
“These investments are an important part of Fair’s continuing and rapid growth, and are further confirmation that the future of car ownership lies in the digital, flexible and affordable model that Fair provides,” said Scott Painter, Fair CEO and founder, in a statement. “We’re gratified that Fair’s reception from the investment community matches the enthusiastic response of our customers, who want to get a car the same way they make countless other digital purchases—from wherever they are and with no long-term commitment.”
In addition to next47, this latest round includes repeat investors BMW, Upfront Ventures and G Squared (formerly known as GSV Ventures, backer of both Uber and Lyft, among many others), along with a few other names: CreditEase, Millennium TVP and 137 Ventures. Fair already shared some investors with Skurt, which had raised around $11.3 million with backers including BMW and Upfront (others included basketball legend Magic Johnson and Winklevoss Capital.)
It’s not the only big move BMW is making into the world of flexible ownership. The company just today announced that it would also buy out Sixt from European car sharing company DriveNow for $260 million (to be clear, it’s iVentures, BMW’s VC arm, investing in Fair, while DriveNow is BMW itself). In one possibility, BMW’s move into upping its stake in Fair could potentially help build out a global operation for its own wider efforts in flexible ownership. Lead investor Siemens, meanwhile, is also preparing for a stronger role autonomous vehicles.
Last week, when we reported on the deal between Fair and Uber — which will also see Fair become Uber’s exclusive leasing partner, initially in the US, for drivers on its service who are looking for a new car to drive — we got wind that the company had raised another round, and this is a confirmation of that.
In the Skurt deal, Fair intends to use the company’s technology to help it expand its business nationwide from its current California footprint.
Skurt, as we have described in the past, aggregates cars from leasing and rental programs, as well as excess inventory from dealerships and automakers, to make up its selection of vehicles and pricing offered to its users, with the service live in LA, San Diego and Miami. Fair said it will use that platform to “quickly scale” its own efforts to deliver and pick up vehicles, as well as to manage its wider fleet. “Skurt’s platform enables the digital initiation and monitoring of customer car deliveries from a central dashboard, as well as real-time notification, fleet location tracking, and instant communication throughout the process,” Fair said in a statement.
The company might move to offer drivers the option of full ownership in the future, but for now the main focus is to build a business around a different premise. Fair’s belief is that in the future, many consumers not want to fully own vehicles, and will instead choose to pay for shorter-term and more flexible offers in order to be able to get the newest vehicles.
This fits with trends that we’ve seen among some owners already, who never buy but lease cars; and many more who already have tied themselves into monthly payments for the vehicles that they do drive, ostensibly with a view to owning these eventually outdated vehicles outright. That is a trend that could get a significant fillip with the next generation of tech-heavy cars, which many believe might become too unaffordable for the vast majority of drivers. In addition, of course, is the wider trend of on-demand-everything triggered with a tap of an app (which in Fair’s case includes options like insurance as well as breakdown cover and maintenance as standard).
These trends are what drove (sorry) investors to pony in on Fair this time around.
“At next47, we’re dedicated to help grow companies that will define the next generation of global innovation,” said T.J. Rylander, partner at next47, in a statement. “It’s clear that consumption models for personal transportation are changing rapidly and subscription-based pricing models are on the rise across all industries. Fair is at the forefront of marrying these two trends and making car ownership much more attractive for today’s consumers while opening up new market opportunities for manufacturers and dealers.”