Zipcar Invests in Competitor?
From @danprimack awesome newsletter this morning comes the news …
Wheelz, a P2P car-sharing company targeting college campus communities, has raised $13.7 million in Series A funding. Zipcar Inc. led the round, and was joined by Fontinalis Partners. www.wheelz.com
I really like the concept of sharing excess capacity across consumers or what many are calling “collaborative consumption” (airbnb is the prime example.) So I have no issue with Wheelz as a concept (crowded as that market may be) but raising money from Zipcar strikes me as odd. A few questions that jump to mind:
- Does Zipcar have a first right of refusal on any acquisition?
- Does Zipcar have plans to invest in other potential competitors? (I know they have a controlling interest in Avancar but that is a bit different imo)
- Is there any built in partnership around the agreement - ie can I as a loyal Zipcar member now leverage wheelz cars when I’m by a campus? (This page is the closest to an answer but feels intentionally ambiguous to me “will enable us to bring our P2P car sharing solution to hundreds of thousands of people across the country”)
- It says Fontinalis Partners joined the round, but wouldn’t it have been more appropriate for them to lead and determine valuation? (I realize this is Ford money and they may not have felt they had the experience pricing a lot of Series A Rounds, but then neither does Zipcar)
we’ve seen this before, as companies moved from storefronts or 800 numbers to the Internet. APIs are certainly going to be the driving force behind this new kind of commerce. The question is how quickly it will spread and how soon independent developers will be able to get in on it.
The algorithms used by movie rental site Netflix are now responsible for 60% of rentals from the site, as we rely less and less on our own critical faculties and word of mouth and more on what Mr Slavin calls the “physics of culture”.