Wednesday, February 22, 2012

Zipcar invests in college car-sharing startup Wheelz

By Kyle Alspach, Boston Business Journal

Zipcar Inc. has led a $13.7 million funding for Wheelz, a Silicon Valley company that connects college students who want to share cars. The company competes in the “peer-to-peer” car-sharing space with Cambridge-founded RelayRides. This is the second investment Zipcar has made in a car sharing company this month.

Zipcar CEO Scott Griffith said in an announcement Wednesday that peer-to-peer car-sharing “could expand the total addressable market for car sharing” — a market where Cambridge-based Zipcar (Nasdaq: ZIP) has been a pioneer. Zipcar, which went public last April, allows members to rent its cars by the hour or day.

Wheelz has been available at Stanford University since September, and plans to launch soon at UC Berkeley, USC and UCLA, according to the company’s website. Cars have hourly and daily rates set by the owners.

Wheelz was founded by Jeff Miller, who holds a master’s in public administration from the Harvard Kennedy School.

Zipcar said Griffith will be joining the board of Wheelz, but said its investment doesn’t represent a majority stake in Wheelz. The Series A round for the startup also included money from Detroit-based Fontinalis Partners, which also has an office in Boston.

Earlier this month, Zipcar did become the majority owner of a Spanish company it had previously invested in, Catalunya Carsharing S.A., known as Avancar. Zipcar now has a 60 percent ownership stake in Avancar, described as the first car sharing operator in Spain.

The investment comes a few months after RelayRides capped a new round of funding at $13 million, led by General Motors. RelayRides was a $50,000 winner of the inaugural 2010 MassChallenge startup competition, but later that year moved its headquarters from Cambridge to San Francisco. The company continues to maintain an office in Cambridge’s Geek Offices.