Investing in emerging companies before they go public can present substantial opportunities for growth. Turo, a peer-to-peer car sharing company, has captured the attention of investors due to its innovative approach and significant market potential. With an estimated total addressable market of $230 billion, Turo represents a compelling investment opportunity. Although Turo has not yet announced an IPO, there are still ways to invest in its future success.
In this article, we will guide you through understanding Turo’s business model, methods to invest in Turo stock, alternative investment options and its major competitors.
Turo: Company Overview
Turo is a leading car-sharing marketplace that allows car owners to rent out their vehicles to individuals. Founded in 2010, Turo has revolutionized the car rental industry by providing a flexible and cost-effective alternative to traditional rental companies. With operations in the US, Canada, and the UK, Turo has experienced significant growth, boasting over 14 million users and 450,000 listed vehicles as of 2023.
Turo’s success is reflected in its impressive financials. In 2023, the company reported a revenue of $500 million, a significant increase from $250 million in 2021. This growth is driven by the rising demand for car-sharing services and the company’s expansion into new markets.
How to Buy Turo Stock?
As of now, Turo has not announced an IPO date, meaning direct investment in Turo stock is not currently possible for retail investors. However, you can prepare for Turo’s IPO by:
- Opening a Brokerage Account: Choose a brokerage that provides access to IPOs and keep an eye on Turo’s IPO news.
- Participating in Pre-IPO Markets: Accredited investors can invest in private markets or pre-IPO platforms like EquityZen or Forge Global.
- Monitoring IPO Announcements: Stay updated with financial news and press releases from Turo for any announcements regarding their IPO. However, if you find yourself busy and don’t have the time to stay updated every time and do thorough research, there are investment tools and platforms available to help you make informed decisions, like Stock Target Advisor.
Invest in Turo’s Partners and Investors:
You can invest in companies that have strong partnerships with Turo, which could indirectly benefit from Turo’s growth. Many of Turo’s 32 investors are private equity and venture capital firms, but there have been a few investments from publicly traded companies.
1. Alphabet Inc:
Google’s parent company, Alphabet Inc. (GOOGL), has invested heavily in various transportation technologies, including autonomous driving through Waymo. Investing in Alphabet can provide exposure to the broader transportation and tech sectors, which align with Turo’s innovative approach.
2. General Motors:
General Motors (GM) is another strategic partner of Turo. GM’s Maven car-sharing service has collaborated with Turo, enhancing both companies’ market reach. Turo and GM partnered in 2012 to create keyless entry, though the project was discontinued in 2013. Despite this, GM remains a significant player in the car-sharing market and could benefit from future innovations and partnerships.
3. Other Notable Investors:
American Express Ventures (AXP) and IAC (IAC) have also invested in Turo. Although these investments are small compared to the overall business sizes, they highlight the broad interest and confidence in Turo’s business model.
How Does Turo Generate Revenue?
Turo’s revenue model is primarily based on transaction fees and additional services:
1. Transaction Fees:
Turo charges car owners a commission on each rental, typically around 15-35% of the rental price. Renters also pay a booking fee.
2. Insurance and Protection Plans:
Turo offers various insurance and protection plans to both car owners and renters, generating additional revenue.
3. Subscription Service:
Turo recently introduced a subscription service, offering members benefits such as reduced service fees and priority support.
Major Competitors of Turo:
Understanding Turo’s competitive landscape is crucial for evaluating its market position and growth potential. Major competitors include Getaround Inc, Uber Technologies, and Avis Budget Group.
1. Getaround Inc.
Getaround Inc. (GETR) is a direct competitor in the car-sharing market, offering similar peer-to-peer rental services. Getaround went public in late 2022 and has since faced significant challenges. While Getaround provides the most direct way for retail investors to gain exposure to the car-sharing industry, the company’s current financial troubles make it a less attractive investment option compared to Turo.
2. Uber Technologies:
Uber Technologies (UBER: NYE) is a major player in the transportation sector, boasting a market capitalization of $137 billion. With its extensive user base, robust infrastructure, and substantial capital, Uber poses a serious challenge to Turo’s market share.
3. Avis Budget Group:
Avis Budget Group (CAR: NSD) operates traditional car rental services and has ventured into the car-sharing market with its Avis Car Rental and Zipcar brands. While Turo aims to disrupt this industry, Avis remains a formidable competitor due to its established presence, deep customer loyalties, and extensive resources.
Conclusion:
Investing in Turo before its IPO can be challenging but not impossible. By exploring private equity opportunities, secondary marketplaces, and investing in Turo’s partners, potential investors can gain exposure to Turo’s growth.
