Peer-to-peer car-sharing firm Turo files IPO to go public – TechCrunch

Peer-to-peer carsharing startup Turo has released its brief to become a publicly traded company in the United States, a process the company began confidentially in August.

the S-1 The document filed with the U.S. Securities and Exchange Commission on Monday does not include the terms of its offer.

Turo, which was founded in 2010 and has been compared to Airbnb for cars, allows passenger car owners to rent their vehicles through the startup’s website or app. The company has 85,000 active hosts and 160,000 active vehicle listings in more than 7,500 cities as of September 30, 2021. Car owners have the opportunity to offset the costs of ownership and users enjoy affordable short-term rentals at a low price. moment when rental car prices rise due to pandemic-induced supply chain issues. The challenges of the traditional car rental industry have certainly helped Turo gain market share, despite stiff competition, but sometimes that popularity comes at a cost, a read on the risk factors part of S- shows. 1.

Quick financial breakdown

Let’s take a look at the financial data first.

Turo generated net revenue of $ 149.9 million in 2020, a 6% growth from the previous year, according to the S-1. Net losses amounted to $ 97.1 million in 2020, a slight improvement from the $ 98.6 million in net losses it suffered in 2019.

Turo highlights a few drivers of revenue growth, including a digital tool called Turo Risk Score. This feature, launched in April 2020, dynamically adjusts the fees Turo charges customers for making a reservation. Turo said that this tool, along with hosts raising the prices of the vehicles they charge to guests, has helped increase its bottom line.

In 2021, both sales and losses have skyrocketed.

Turo claims to have generated $ 330.5 million in net income in the first nine months of 2021, a whopping 207% increase from the $ 107.8 million for the same period in 2020. Its net losses have also increased . Turo reported a net loss of $ 129.3 million for the nine months ended September 30, 2021, up from $ 51.7 million for the same period in 2020.

The reason? Turo notes in its S-1 that revenue increased as the number of days booked increased as did the gross booking value per day.

By scanning the S-1, it also appears that Turo tried to do more with less in 2020 and has since turned off the financial tap this year. The company tightened spending in 2020, with operating expenses falling from $ 133.9 million in 2019 to $ 95.8 million in 2020.

The first nine months of 2021 tell a different story. The company’s operating expenses for the first nine months of the year were $ 124.01 million compared to $ 71.6 million for the same period last year.

Risk factors

Risk factors the company faces include the obvious “what if people weren’t using Turo” and “we face competition” from similar apps and traditional car rental companies. But a few others stand out.

On the one hand, Turo notes that the COVID-19 pandemic has added volatility to its business. The company was forced to lay off staff and even shut down operations in Germany in 2020, only for the company to return to “above pre-Covid levels”.

The car rental app notes that it can be held responsible for the criminal activities of its guests. There don’t appear to be any prosecutions or fines, but in August of last year, Turo and other peer-to-peer rental apps have been used by criminals for human trafficking and other crimes, a trend that US Customs and Border Protection admits to be a growing trend near the border.

Turo is also responsible for lawsuits brought by cities – or more specifically airport authorities – that would require the long-standing start to get car rental permits. And in this area, Turo has indeed been sued and counter-sued. There have been four lawsuits relating to the use of the airport and three of them, including one initiated by Turo against the city of Los Angeles, have yet to be resolved.

Opportunities and Growth

Despite the potential risks, Turo estimates its current addressable market at $ 146 billion and its total addressable market at $ 230 billion.

“We estimate that our $ 230 billion AMR includes $ 134 billion in North America, $ 65 billion in Europe, and $ 31 billion in the rest of the world (which consists of selected countries in which we believe we have a medium and long term opportunity of hosts on board) ”, according to the dossier.

In particular, the company appears to be ready to expand its operations in its US domestic market as well as internationally. It is also prepared to make strategic acquisitions and partnerships “to provide our hosts and guests with services and features that we do not currently offer in-house.”

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