Turo, a service that competes with Enterprise and other car rental firms by renting you other people’s cars by the day, announced it had raised $250 million entirely from media and internet holding company InterActiveCorp, owner of Vimeo and Match Group.
It’s the latest move by an old-line tech conglomerate to become the largest shareholder of a peer-to-peer car rental business. Turo rival Getaround, which rents cars by the hour, last year raised $300 million from SoftBank’s Vision Fund.
Both Turo and Getaround have been around for about a decade, and are trying to grow difficult businesses. They have to manage insurance risks, run hefty customer service operations and make it easy for customers to unlock cars remotely. Plus, there’s plenty of competition already in both hourly and daily rental cars from companies such as Enterprise, Avis’ Zipcar, even Lyft and Lime. There’s also the issue of potential regulation for Turo.
But the businesses are becoming significant in size. The Wall Street Journal reported that Turo generated about $250 million in revenue last year. Getaround has been busy expanding globally, using SoftBank’s cash to buy similar firms in Europe.
The success and expansion of car rental firms is also important to urban policy goals to reduce car ownership—people who don’t own cars still need easy and relatively inexpensive access to cars for trips and errands.