Zipcar preparing $75m float after Streetcar deal
Wednesday 02 June 2010
Zipcar, the hire car service for city dwellers, is planning a stock market flotation in the US which could raise up to $75m. The 10-year-old company filed offer documents yesterday, a month after it dramatically expanded in Britain with the acquisition of a copycat service, Streetcar. About $5m of the money being raised will go to pay back former Streetcar investors.
Zipcar pioneered what it called car-sharing, a service that charges an annual membership and rents cars at an hourly or daily rate. The service is successful in markets in which car ownership is lower and parking is scarce and expensive, such as urban areas and colleges. The market has been successful enough that larger car rental companies such as Hertz and Enterprise have started their own rivals.
The acquisition of Streetcar at the end of April was rumoured to have been a $50m deal, signalling Zipcar's ambitions to expand across Europe. Zipcar members now number more than 400,000 in 13 major cities and at more than 150 college campuses in North America.
The company has posted losses every year since it was founded and said in a regulatory filing that it also expected losses in 2010. Revenue rose 22.5 per cent to $33.2m in the three months to 31 March, while its net loss widened from $3.0m to $5.3m. If the period had included Streetcar's results, Zipcar would have posted revenue of $39.6m and a loss of $6.1m.
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