Peer-to-peer car-sharing startup Turo has released its file to become a publicly traded company in the United States, a process the company began covertly in August.
The S-1 document submitted Monday to the US Securities and Exchange Commission does not include the terms of its offer.
Turo, which was founded in 2010 and has been compared to Airbnb for cars, allows private car owners to rent out their cars through the startup’s website or app. The company boasts 85,000 active hosts and 160,000 active vehicle listings in over 7,500 cities as of September 30, 2021. Car owners get the opportunity to offset costs of ownership, and users benefit from affordable short-term rentals at a time when rental car prices are increasing due to chain issues. Supply caused by the epidemic. Sure, challenges in the traditional car rental industry have allowed Turo to gain some market share, despite stiff competition, but that popularity has come at a cost at times, reading the risk factors portion of the S-1 offering.
rapid financial collapse
Let’s first look at the financial statements.
In 2020, Turo generated $149.9 million in net profit in 2020, an increase of 6% over the previous year, according to S-1. Net loss was $97.1 million in 2020, a slight improvement from $98.6 million in net loss in 2019.
Turo points to two drivers of its revenue growth, in particular a digital tool called Turo Risk Score. This feature, launched in April 2020, dynamically adjusts the fees Turo charges guests to complete a reservation. Turo said that this tool, along with hosts increasing the vehicle prices they charge guests, contributed to its net revenue increase.
In 2021, sales and losses increased significantly.
Turo says it generated $330.5 million in net revenue in the first nine months of 2021, a massive 207% increase from $107.8 million for the same period in 2020. Its net loss has also expanded. Turo reported a net loss of $129.3 million for the nine months ended September 30, 2021, compared to $51.7 million for the same period in 2020.
Reason? Turo notes in S-1 that revenue increased as the number of days booked increased along with the total value of the reservation per day.
Surveying the S-1, it also appears that Turo tried to do more with less in 2020 and has since brought the financial faucet back on again this year. The company tightened its spending in 2020 with operating expenses dropping 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 in the first nine months of the year amounted to $124.01 million, compared to $71.6 million during the same period last year.
The company’s risk factors include “what if people don’t use Turo” and “we’re facing competition” from similar apps and traditional car rental companies. But a few others are still stuck.
First, Turo notes that the COVID-19 pandemic has added volatility to its business. The company had to lay off employees and even close its operations in Germany in 2020, only for the company to return to a level “above pre-Covid levels”.
Car rental application indicates that it may face responsibility for the criminal activities of its hosts. There do not appear to be any lawsuits or fines, but in August last year Turo and other peer-to-peer rental apps were found by criminals for human trafficking and other crimes, a trend reported by US Customs and Border Protection that is a growing trend near from the border.
Turo is also responsible for lawsuits from cities – or more specifically airport authorities – that require a long-running start-up to obtain rental car permits. And in this area, a lawsuit was in fact brought against Toro. There have been four lawsuits related to the use of the airport and three of them, including one that Turo brought against the City of Los Angeles, have yet to be settled.
Opportunities and growth
Despite the potential risks, Turo estimates its current serviceable market at $146 billion and its total servicable market to be $230 billion.
“We estimate that the $230 billion TAM business includes $134 billion in North America, $65 billion in Europe, and $31 billion in the rest of the world (which consists of select countries in which we believe we have a medium to long-term opportunity adding on board the plane)”, according to the recording.
Notably, the company appears ready to expand its operations within its home market in the United States as well as internationally. It is also ready to make some strategic acquisitions and partnerships “to provide services and features to our hosts and guests that we do not currently offer.” In House.”