Zipcar, trading on the Nasdaq under the ticker “ZIP,” gained 67%, opening at $30………..
If you haven’t heard, Zipcar is a car-sharing service that’s popular in cities like San Francisco and Boston for example. Zipcar members rent cars, located in convenient spots, they pay by the hour or day plus their annual membership fee. What makes them so attractive is that the cars are located in locations with high foot traffic so they are much easier to get to than having to go to central location which can often mean the airport. Their other big advantage is hourly use charges this opens up a much bigger market with students for example. It has taken the thick end of ten years to reach critical mass and for the service to become truly convenient.
The veterans of car rental like Hertz and Enterprise have reacted by adding their own car-sharing services with home/office delivery.
Anyway on to the IPO Zipcar were hoping to sell 8.3 million shares for $14-$16 each, but blew the expectations and ended up selling almost 10 million shares at $18 each for a total of $174.3 million in new equity. That is pretty impressive for a company who had racked up losses of $65 million by the end of last year.
This was of course excellent news for America Online co-founder Steve Case, after Zipcar’s first day of trading on April 14, the car- sharing company had a market value of $1.12 billion. Case’s Revolution LLC owns about 18 percent, valuing its investment at $199 million.
LivingSocial, is an online-coupon service targetting market leader Groupon Inc., is the next shot at payback for Steve’s fund. Like his other investments, he got in early enough to help transform the ambitious start-up into a business with much broader consumer appeal.