Photo: Flickr, CC
Wanna Own a Piece of Zipcar?
Zipcar, the biggest car-sharing player in the U.S., has filed the paperwork yesterday for a $75 million initial public offering (IPO). It was only two years ago that Zipcar bought its smaller rival Flexcar, and since then it has been doing very well by some metrics, though it isn't yet profitable. What will going public mean for the company?
Photo: Flickr, CC
Some background on Zipcar:
With a fleet of 7,000 vehicles, more than 400,000 members (who can rent the car by the hour or day), Zipcar relies on the web, software, data centers, GPS, mobile networks and other communication tools to provide mobility as a service. In the 12 months ending March 31 of this year, the company processed more than 2.6 million reservations. (source)
The overall goal is to keep expanding. The target is to be present in about 100 metro areas and university campuses around the world. "Zipcar's plans for the proceeds from the [IPO] include, among other things, repaying more than $40 million in debt, developing new services, expanding its fleet and paying some $5 million to shareholders in the recently acquired Streetcar."
This seems smart. They could probably be profitable if they slowed down expansion, but in the long-term that would probably mean a much smaller company and less potential profits. It's kind of like the approach that Amazon.com, planning for the long-term instead of the next quarter.
In any case, best of luck to Zipcar!
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