Thu. Jan 20th, 2022

Peer-to-peer car-sharing start-up Turo has filed to become a publicly traded company in the United States, a process the company began confidentially in August.

The S-1 filing Monday with the U.S. Securities and Exchange Commission does not contain terms of the offering.

Founded in 2010 and compared to Airbnb for cars, Turo allows private car owners to rent out their vehicles through the startup’s website or app. As of September 30, 2021, the company has 85,000 active hosts and 160,000 active car listings in more than 7,500 cities. are increasing due to pandemic-induced supply chain problems. Challenges in the traditional rental car industry have certainly enabled Turo to gain market share despite strong competition, but that popularity has sometimes come with a price tag, according to the risk factors section of the S-1.

Quick financial overview

Let’s look at the finances first.

In 2020, Turo generated net sales of $149.9 million in 2020, up 6% from the prior year, according to the S-1. Net losses were $97.1 million in 2020, a slight improvement from $98.6 million in net losses in 2019.

Turo points to a number of drivers behind its revenue growth, most notably a digital tool called the Turo Risk Score. Launched in April 2020, this feature dynamically adjusts the fees Turo charges guests to complete a booking. Turo said this tool, along with hosts raising prices for vehicles they charge to guests, contributed to the increased net revenue.

In 2021, sales and losses shot up.

Turo says it generated $330.5 million in net sales in the first nine months of 2021, a whopping 207% more than $107.8 million for the same period in 2020. Net losses also increased. 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.

The reason? Turo notes in its S-1 that revenue increased as the number of days booked increased along with the gross booking value per day.

Scanning the S-1 also shows that Turo tried to do more with less in 2020 and has since turned the financial tap back on this year. The company tightened its spending in 2020, with operating expenses falling 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 for the first nine months of the year were $124.01 million, compared to $71.6 million in the same period last year.

Risk Factors

Risk factors facing the company include the obvious “what if people don’t use Turo” and “we face competition” from similar apps and traditional car rental companies. But a few others stand out.

First, Turo notes that the COVID-19 pandemic has increased the volatility of his company. The company was forced to lay off staff and even closed its operations in Germany in 2020, only to see the company roar back to “above pre-Covid levels”.

The car rental app notes that it can be held liable for criminal activities of its hosts. There appear to be no lawsuits or fines yet, but in August last year, Turo and other peer-to-peer rental apps were found to have been used by criminals for human trafficking and other crimes, a trend US Customs and Border Protection admits. it is a growing trend near the border.

Turo is also liable for lawsuits from cities – or more specifically airport authorities – that would require a lengthy startup to obtain car rental permits. And in this area, Turo has in fact been charged and prosecuted. There have been four lawsuits related to the use of airports and three of them, including one filed by Turo against the city of Los Angeles, have yet to be settled.

Opportunities and growth

Despite potential risks, Turo estimates its current usable addressable market at $146 billion and its total addressable market at $230 billion.

“We estimate that our $230 billion TAM includes $134 billion in North America, $65 billion in Europe and $31 billion in the rest of the world (which consists of select countries where we believe we have medium to long-term opportunities. have to have onboard hosts),” the submission said.

Notably, the company appears poised to expand its business both within its US home market and internationally. It is also ready to make some strategic acquisitions and partnerships “to offer our hosts and guests services and features that we do not currently offer at home.”

To develop …

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