After a banner 2020, the car rental website Turo announced it is planning to pursue an initial public offering (IPO) in 2021, either traditionally or via a merger with a blank-check corporation.
Turo CEO Andre Haddad told The Wall Street Journal that the peer-to-peer car rental startup has turned a quarterly profit for the first time, with full-year profitability anticipated next year. Before interest and taxes, the company cut its losses in the second half of 2020 to $7.2 million from $46.9 million in 2019.
In order to reach profitability, Haddad laid off more than 100 people at the end of March, about one-third of the company’s workforce. In April, he slashed expenses with the goal of amassing three years of cash.
Turo connects individual vehicle owners with drivers looking to rent vehicles by the day, week or month, including Lamborghinis and other luxury cars. The company took off during the pandemic as people changed their buying behaviors, swapping local trips and joyrides for air travel and overseas destinations. Its primary competitor is the private car-renting marketplace Getaround.
The startup earns money by charging a percentage of the rental fees, as well as separate booking fees. The Silicon Valley company said that when the 2020 books are closed, it will have a record $153 million in revenue. In the second half of 2021, the firm is expecting to hit more than $92 million in revenue, up 7 percent over the same period last year, according to WSJ.
Haddad was formerly the founder and CEO of iBazar SA, an online auction platform that he sold to eBay in 2001. He said he sold the company at a deep discount because he failed to be decisive when the dot-com bubble burst.
“We did not manage that crisis very well, so that experience stayed with me,” Haddad said.
Car rental company Hertz filed for Chapter 11 bankruptcy protection in May after the COVID-19 pandemic killed travel and tourism along with the car rental business. The company filed with an excess of $1 billion cash on hand and said it might look to borrow more.