Turo Inc., the operator of the world’s largest car sharing marketplace, has filed for an initial public offering on the New York Stock Exchange.
San Francisco-based Turo announced its IPO plans late Monday. The startup said in the regulatory filing for the offering that it’s hoping to raise $100 million, a figure often used as a placeholder until the final fundraising target is determined.
Turo launched in 2010 and has raised more than $467 million in funding since. The startup’s car sharing marketplace enables car owners, known as hosts on the platform, to rent their cars to guests. Turo had about 1.3 million active guests across the U.S., Canada and the U.K. as of Sept. 30.
For hosts, the startup provides features that make it easier to manage car listings and help with tasks such as purchasing insurance. A feature called Automatic Pricing enables hosts to have the platform automatically set the optimal price for a vehicle listing based on factors such as current demand.
For guests, Turo provides a search bar that makes it possible to filter vehicles by location, type, price and other factors. In its IPO filing, Turo stated that its platform provides a more convenient experience than traditional car rental services while offering more flexibility than ride-hailing apps.
“Ride sharing solutions support limited use cases, largely centered around point-to-point mobility,” Turo is arguing to prospective investors. “Ride sharing at its core does not scale to accommodate travel behavior or requirements beyond commuting and intra-urban mobility.”
Turo’s platform, in contrast, supports a broader range of use cases. The company estimates that in the nine months ended Sept. 30, 2021, about 32% of all total days booked by our guests on our platform were for seven to 30 days, and about 4% were at least 30 days in length, “highlighting how our platform supports longer duration travel use cases.”
Turo’s value proposition is winning over a growing number of consumers. Surging user demand helped the startup more than double its net revenue, to $330.5 million, in the first nine months of 2021. The startup argues that it has even bigger significant growth opportunities ahead: Turo estimates that its total addressable market is worth $230 billion.
Like other fast-growing tech startups, Turo is not yet profitable. In recent quarters the startup has been investing heavily to support its sales momentum: It logged a net loss of $129.3 million in the first nine months of 2021, up from $51.7 million a year earlier.
Turo plans to continue investing in growth after going public. “We aim to pursue strategic acquisitions and partnerships to offer our hosts and guests services and features that we do not currently offer in-house,” the startup stated in its IPO filing. Turo also intends to expand into more international markets.
Turo’s investments in growth initiatives could prove particularly valuable if companies from adjacent areas such as the ride-hailing segment move to launch competing car sharing services. Uber Technologies Inc., for example, has expanded into numerous new markets over the years, including scooter rentals and food delivery. Turo’s IPO filing addressed the possibility of increased competition, noting that “our current or new competitors may adopt certain aspects of our business model” in the future.
Morgan Stanley and J.P. Morgan are the lead underwriters of the startup’s IPO. In its regulatory filing, Turo said that it plans to make up to 5% of the shares sold in the listing available through a directed share program. The program would enable eligible guests and hosts to purchase shares at the IPO price.
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