Car-sharing marketplace Turo has scrapped its IPO plans, nearly three years after the company first filed to go public.
This raises concerns about other tech IPOs in the works.
Turo is currently profitable, but its public reporting from 2023 and 2024 reveals slowing growth. In 2021, Turo’s adjusted EBITDA was $81.1 million, but it dropped to $48.8 million by the end of 2023. And in the first nine months of 2024, its adjusted EBITDA fell 46% year-over-year to $25.6 million.
Its income from operations went from a $21.1 million profit in the first nine months of 2023 to a $9.7 million loss in the first nine months of 2024.
And its bookings rate growth has also slowed. The total days booked on Turo jumped 75% from 2021 to 2022. But in the following year, it grew by 27.5%. And in the first nine months of 2024, booking rates were up only 9% year-over-year.
Despite slowing growth, Turo would still be a good IPO candidate as investors have been prioritizing profits and sustainable business models. Its gross profit has been growing, hitting $452.6 million in 2023, up 11% from 2022. Its gross profit for the first nine months of 2024 was $334 million, down 5% year-over-year.
But for many startups, going public right now remains unattractive amid a shaky IPO market and political uncertainty. Many are opting to stay private for longer: Stripe, SpaceX and Canva all ran tender offers last year in order to let employees cash out on their vested stock holdings.
For the venture-backed companies that took the plunge last year, it’s been a mixed bag of results. Rubrik, Reddit and Tempus AI have seen their stock prices soar over 100% since their public market debut, but the stock price of VCs’ most recent IPO darling, ServiceTitan, has been flat since mid-December.
For VCs nearing the end of their fund life and who need to distribute liquidity back to their LPs, the trend of startups shying away from IPOs is a concerning one.
After more than two years without a robust stream of IPOs—and the ensuing lack of distributions—Turo’s move is unlikely to be welcome news for limited partners across the venture industry.
Turo’s largest VC shareholders include G Squared, August Capital and Canaan Partners.
Featured image courtesy of Turo
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