RelayRides has raised a $25 million Series B round of financing led by Canaan Partners. Joining in on the investment were existing investors August Capital, Google Ventures and Shasta Ventures. RelayRides enables car owners to make extra money when not using their vehicles by renting their cars out to non-car owners, who use the temporary rides to run errands, travel and more. The company will use the funds to accelerate customer acquisition, enhance existing products and expand into new markets. Currently available in 2,300 cities in the U.S., it has grown rental bookings by 14x since its launch in March 2012. As part of the transaction, Deepak Kamra of Canaan will join RelayRides' Board of Directors.
RelayRides has become one of the major players in the peer-to-peer car rental space, but the company's path was paved years before by another car-sharing giant—Zipcar. Founded in 2000, Zipcar racked up about $118 million in VC funding from investors like Benchmark Capital, Greylock Partners and Globespan Capital Partners, before eventually being acquired for $491 million by traditional rent-a-car company Avis. Its success, as well as the success of more recently founded RelayRides, has resulted in a number of similar companies entering the scene. And VC investors have taken notice.
Big name VC firms like Index Ventures, Google Ventures, Menlo Ventures, Andreessen Horowitz, First Round Capital and more have invested in the peer-to-peer car rental space within the past few years, giving at least one company in the space a chunky valuation in the process. That company is Getaround, a car sharing service that raised $14 million of Series A funding at a valuation of nearly $45 million in August 2012. One of the most recent deals was for a similar company called Drivy, which landed a €6 million ($8.2 million) Series A financing round last month. And FlightCar, a car sharing service designed specifically for those traveling to and from airports, raised $5.5 million of Series A funds in April 2013.