Turo, a peer-to-peer car rental marketplace, has raised $92 million in a new funding round co-led by Daimler and SK Holdings (each putting in $35 million). Other investors include Liberty Mutual. San Francisco-based Turo also said that it is expanding into Europe via the acquisition of Croove, an identical service in Germany that's been incubated by Daimler.
Why it matters: The concept of car ownership is fast evolving, promoting automakers (Daimler) and insurance companies (Liberty Mutual) to use their investment arms to capitalize on new models.
Daimler: This is the German automaker's latest investment in alternative transportation services. Earlier this week, it led a reported $250 million round in carpooling service Via. It has also invested in ride-hailing company Careem, electric charging company ChargePoint, HD mapping company Momenta.ai, and delivery robot company Starship. It's also inked deals with Uber to roll out self-driving cars.
"Frankly, we at Turo are very skeptical about this hourly model of sharing," Turo CEO Andre Haddad told Axios in reference to services like Zipcar, due to low margins (Turo rentals are by the day, not the hour). And in the case of Zipcar and others that own their fleets, the added costs of the cars make the business even more challenging, according to Haddad.
Turo's business: As of 2017, the company has 4.03 million "sign ups," up from 2.31 million in 2016. It also has 171,500 car listings, up from 121,000 last year, and just 65,600 in 2015.
- One challenge for Turo, however, remains insurance legislation. The company isn't currently operating in the state of New York where it can't obtain commercial group insurance to cover its customers, according to Haddad. Note that it's different for companies that own their fleets.