Business news from the Finally Fast team
On Wednesday Zipcar, Inc. a leading car sharing network, and Wheelz, Inc., the first peer-to-peer car sharing company targeting college campus communities, announced that Zipcar is the lead investor in a $13.7 million Series A round of funding for Wheelz.
“Based on our analysis and primary research, we believe P2P could expand the total addressable market for car sharing,” said Zipcar Chairman and CEO Scott Griffith. “We chose to make this investment because we believe that Wheelz has the right leadership, technology and business model to succeed in the emerging P2P space.”
Also participating in the round is Detroit-based Fontinalis Partners, a leading transportation technology strategic investment firm. Mark Schulz, 30-year automotive industry veteran, former President for International Operations at Ford Motor Company and Founding Partner at Fontinalis, will be joining Scott Griffith on the Wheelz board. Also joining the board is Jim Freer, former vice-chairman of Ernst & Young.
“We founded Fontinalis to help shape the future of mobility,” said Bill Ford, Founding Partner of Fontinalis Partners. “We are committed to investing in entrepreneurs and accelerating the growth of breakthrough technologies and business models such as Wheelz to explore that future.”
Wheelz has designed its car sharing platform specifically to meet the needs of campus communities by connecting students who own cars with students who need them. The model empowers car owners to earn money from their car when they are not using it while providing convenient and affordable access for car borrowers to conveniently get the vehicle they need for any occasion including errands, shopping excursions, dates and weekend trips.
“We are thrilled to be partnering with Zipcar and to welcome Scott to the Wheelz board. Zipcar is the pre-eminent car sharing company in the world,” said Jeff Miller, founder and CEO of Wheelz. “Zipcar knows and understands the business complexities of car sharing better than anyone on the planet; we will benefit tremendously from this expertise as we continue to grow. Equally exciting, their knowledge related to operating within university communities and deep ties to the automotive ecosystem will be invaluable as we scale the business.”
“We now live in a world that we envisioned years ago. We see consumers everywhere changing their buying patterns in favor of self-service, access versus ownership. On the heels of our success, interesting new mobility models and transportation-related technologies are emerging,” said Griffith. “This investment is our first step in the direction of potentially offering a broader array of mobility services. We believe our strong brand and first to scale advantage put us in a unique position to exploit the network effects and business synergies Zipcar can bring to the broader mobility space.”
As Zipcar does not have majority ownership in Wheelz, Zipcar will account for its investment under the equity method of accounting and expects to record its share of Wheelz’ net loss on this basis in the amount of approximately $1 million in 2012, which was factored into the guidance Zipcar provided in conjunction with the release of its 2011 fourth quarter results on February 14th. There will be no impact to Zipcar with respect to revenue or Adjusted EBITDA.