Amid a rebound in short-distance travel, Getaround, a Silicon Valley car rental startup, has raised some new money to meet demand. The startup, which allows customers to instantly rent cars near them in more than 100 cities, announced today that it has raised $140 million in a Series E deal, bringing its total known venture funding to $600 million.
The Series E deal was led by PeopleFund, with new investors including Reid Hoffman and Mark Pincus’ Reinvent Capital, AmRest founder Henry McGovern, Pennant Investors and VectoIQ partners Steve Girsky, Mary Chan and Julia Steyn also deploying capital. Previous investors participating include SoftBank Vision Fund, Menlo Ventures and more.
The money comes after the car-sharing service faced its own set of hurdles before and during the coronavirus pandemic. In January, the startup reportedly laid off 150 employees, reducing field operations and the size of numerous global teams. In March, bookings dropped 75%, according to CEO Sam Zaid. Getaround laid off 100 employees. Zaid pointed to struggles within SoftBank, which did a $300 million Series D round in the company in mid-2018, as part of the reason.
Now, Zaid says that “Softbank has been an extremely supportive partner to Getaround at every critical stage of our journey this year including in January and through COVID,” in a statement to TechCrunch. The investor, as noted above, participated in the latest financing.
The pandemic seems to have gone from a pain point to an opportunity for growth at Getaround. After the March layoffs, Getaround saw demand for its service come back in May: People didn’t want to fly because of the risk of catching COVID-19, but they didn’t mind driving. Getaround focused on contactless access to passenger cars and improving the platform. As short-distance travel to local joints became a more attainable option for those seeking a way to travel, Getaround found green shoots. By July 1, Getaround rehired all of its furloughed employees, according to Zaid.
Zaid estimates that Getaround has seen worldwide revenue more than double from its pre-COVID baseline and says gross margins have continued to improve. The financing, which was raised in the summer, will be used to help the business invest in car technology, bring on new partners and reach global profitability.
Getaround, per Zaid, currently has more than 6 million users globally.
Getaround isn’t alone in benefitting from consumers’ new travel taste buds. Airbnb, which cut 1,900 jobs, or 25% of its entire global workforce, is finding hope in focusing on local rentals. In June, according to the WSJ, Airbnb entirely redesigned its website and algorithm to show travelers where they could rent in their neighborhoods. The travel company is rumored to be going public in November.
Along with the financing, Getaround announced four new executives: Head of North American business Dan Kim, who formerly worked as the head of Airbnb plus and head of global sales and delivery at Tesla; CFO Laura Onopchenko, who is the former CFO of NerdWallet; vice president of people and culture Tia Gordon, formerly the director of people operations at Google; and vice president of customer experience Ruth Yankoupe, former vice president of Customer Experience at OYO.