San Francisco, California, United States
Industry: Car sharing
Region: US 🇺🇸
Expected Valuation: $1.28 billion
IPO Date: 2023 (expected)
Key Company Facts
|Headquarters||San Francisco, US|
|Number of employees||330 (2021)|
|IPO Date||2023 (expected)|
|Number of investors||N/A|
|Total funding||$302.5 billion USD|
|Number of account user||14 million (2020)|
|Valuation estimate||$1.28 billion USD|
Company Overview & History
Turo, an American peer-to-peer carsharing company, was launched in June 2010 under the name RelayRides in Boston. The concept of this peer-to-peer car-sharing business was inspired by other online marketplaces such as Airbnb and eBay.
The company later expanded to San Francisco, where it is currently headquartered.
RelayRides initially required installing an in-car device that enabled GPS monitoring, remote unlocking, and smart card entry, but this requirement was later discontinued in favor of in-person key exchange.
In 2012, RelayRides was launched nationwide in the U.S. and received $52.5 million in funding from various investors between 2010 and 2014.
The company then changed its name to Turo in 2015 to reflect its shift away from short-term to long-term rentals. By 2021, Turo had over 350,000 vehicles listed and operated in more than 56 countries.
Turo’s financial performance has shown significant growth over the years. In 2019, the American holding company IAC invested $250 million in Turo, a deal that valued the company at over $1 billion. In 2022, Turo generated revenue of $746.6 million, up 59% from the $469 million in 2021.
Despite increasing costs, Turo turned profitable in 2022, with a net income of $154.7 million, up from a net loss of $40.4 million in 2021.
The company also reported an adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) profit of $79.7 million in 2022, roughly equivalent to its 2021 result.
The company’s financials suggest that it is ready to go public, with plans revealed in its S-1/A filing.
Turo’s business model is an asset-light one, akin to a peer-to-peer car-sharing platform. The company allows private car owners to rent out their vehicles through an online and mobile interface.
Initially, the company focused on individual car owners, but over time it has evolved to include more professional users who provide a handful of cars to the platform.
Turo’s business seems to have thrived in the post-pandemic era, as many people felt the need to move and used and new car prices were above historical norms. Car rentals, as evidenced by Turo’s results, appear to have benefited from these trends.
Turo, a peer-to-peer car-sharing company, faces several risk factors that could potentially impact its business operations.
One primary concern is the general market risk, which includes the possibility that people might not use Turo’s services or choose other similar apps or traditional car rental companies instead.
The COVID-19 pandemic also brought volatility to its business, resulting in layoffs and the temporary closure of its operations in Germany in 2020.
Turo’s platform model presents additional risks. For instance, the company may face liability for the criminal activities of its hosts.
While there have not been any lawsuits or fines as of yet, Turo and other peer-to-peer rental apps have been found to be used by criminals for activities like human trafficking.
The company is also liable for lawsuits from cities, or more specifically, airport authorities, requiring Turo to obtain rental car permits.
Turo has faced lawsuits in this area, including four regarding airport use, three of which, including one initiated by Turo versus the City of Los Angeles, have yet to be settled.
The increasing prices and often limited availability of traditional rental cars present a significant market opportunity for Turo.
Skyrocketing rental car prices have become one of the major stories during the pandemic era, with prices reaching record highs in July 2021.
In January 2023, car rental prices were up 36% compared to January 2020, the last comparable month before COVID lockdowns in the U.S.
In response to this, peer-to-peer car sharing platforms like Turo have continued to grow in popularity. The global car sharing market surpassed $2 billion in value in 2020 and is expected to grow 20% annually from 2021 to 2027.
This trend indicates a significant market opportunity for Turo, especially given the issues with traditional car rental services.
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