URL:http://techcrunch.com/2013/04/15/flightcar-5-5m-funding/
Seeking to disrupt the $10 billion airport car rental business, FlightCar, a sort of Airbnb for airport rentals, allows travelers leaving town to make their cars available for those who are visiting. The startup, which launched its service at San Francisco International Airport just a few months ago, is hoping to open for business in a number of other markets over the course of the rest of the year. To do that, it has raised a $5.5 million Series A round, with a number of high-profile investors, including General Catalyst, Softbank Capital, Airbnb founder and CEO Brian Chesky, as well as Ryan Seacrest’s Seacrest Global Group.
Other investors in the round include Reddit co-founder Alexis Ohanian, Posterous founder Garry Tan, Auctomatic founder Harj Taggar, Justin.TV founder Emmett Shear, former Expedia CEO Erik Blachford, First Round Capital, and Andreessen Horowitz. The new funding comes on top of $590,000 in seed funding from Y Combinator and SV Angel that it had received prior to its initial launch.
FlightCar’s service works like this: Travelers drop their vehicles off at one of the FlightCar lots at an airport where they are available. Incoming visitors can then rent these vehicles at lower rates than they would find at airport rental chains. If a car is rented, the vehicle’s owner is compensated with gas cards equal to up to $10 for each day a car is rented. If not, the vehicle’s owner gets free parking, which by itself could save them up to $18 a day in long-term parking.
Cars must have been made by 1999 and have fewer than 150,000 miles to be listed. But FlightCar provides a free wash for all cars that are listed on its site. For travelers, it also provides a valet service to and from the airport for when cars are picked up or dropped off. Most importantly, the service is backed by a $1 million insurance policy for both owners and renters.
According to FlightCar co-founder Shri Ganeshram, the new funding will be used to hire some new engineering and design talent, and to speed up launching its service in new markets. Next up will likely be Boston, as Ganeshram is relocating to the Cambridge area, where he hopes to recruit FlightCar’s new employees.
The founding team behind FlightCar, which also includes Rujul Zaparde and Kevin Petrovic, is still young. The three were just 18 years old when the company was founded*, and so they believe they will have better luck recruiting engineering talent that’s closer to their age, straight out of MIT, than to compete for new employees in Silicon Valley. In addition to SFO and Boston’s Logan International Airport, Ganeshram says the team hopes to have operations at two or three other airports by the end of the year.
With its list of investors, it should be well positioned to tackle the problems that come with running a peer-to-peer business in the travel space. After all, Chesky, Ohanian, and Blachford, as well as some others, should all be able to give some insight into how to connect with consumers as well as improving the quality service of a peer-to-peer business model.
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* Petrovic’s 19th birthday is today. Happy birthday, Kevin.
February 1, 2012
$610k
FlightCar is the first company to establish a marketplace that allows vehicle owners parking at the airport to rent out their cars to other travelers. Owners get free airport parking, and renters choose from a wider selection of vehicles at lower prices than those offered by the major car rental chains. A similar peer-to-peer car sharing model successfully exists at a local level, where owners rent out their vehicles to neighbors. FlightCar is the first to bring this model...