Turo has begun the process of becoming a publicly traded company in the United States.
The S-1 document does not include terms for the offering.
Turo is a startup that allows private car owners to rent out their cars through the website or app. As of September 30, 2021, the company had 85,000 active hosts and 160,000 active vehicle listings. Car owners and users get the chance to offset ownership costs, and users get the benefit of affordable short-term rentals at a time when rental car prices are increasing due to supply chain issues. Turo has gained some market share despite steep competition, but that popularity has come with a cost, a reading of the risk factors portion of the S-1 shows.
Financial breakdown in a few seconds.
Let's take a look at the financials.
Turo generated net revenue of 149.9 million in 2020, a growth of 6 percent from the previous year. The net losses were slightly better in 2020 than they were in 2019.
The Turo Risk Score is a digital tool that Turo points to as a driver of revenue growth. Turo launched a feature in April 2020 that adjusts the fees it charges guests. Turo said that the tool and increases in the prices of vehicles that they charge to guests contributed to its increased net revenue.
Sales and losses went up.
Turo says it generated $330.5 million in net revenue in the first nine months of the year, which is a 207% increase from the same period in 2020. Its net losses grew as well. Turo had a net loss of $129.3 million for the nine months ended September 30, 2021, compared to $51.7 million for the same period in 2020.
The reason? Turo notes in its S-1 that revenue increased as the number of days booked rose.
Turo tried to do more with less in 2020 and has since turned the financial faucet back on. The company's operating expenses dropped from $133.9 million in the year of 2020 to $95.8 million in the year 2014–2018.
The first nine months of the year tell a different story. In the first nine months of the year, the company had operating expenses of $124.01 million, compared to $71.6 million in the same period last year.
There are risk factors.
Turo is facing risk factors that include competition from similar apps and traditional car rental companies. A few people stick out.
Turo says that the COVID-19 pandemic added volatility to its business. The company was forced to lay off staff and close its operations in Germany in 2020, only to have the business come roaring back to pre-covid levels.
The car rental app may be held liable for criminal activities of its hosts. In August last year, Turo and other peer-to-peer rental apps were found to have been used by criminals for human trafficking and other crimes, a trend that the U.S. Customs and Border Protection admits is.
Turo is liable for lawsuits from airports that would require rental car permits. In this area, Turo has been sued. Three of the four lawsuits regarding airport use have yet to be settled, including one initiated by Turo against the City of Los Angeles.
Growth and opportunities.
Turo estimates its current addressable market to be over $150 billion and its total addressable market to be over $200 billion.
The filing states that the company estimates that it has a total of $230 billion in assets, which includes $134 billion in North America, $65 billion in Europe, and $31 billion in the rest of the world.
The company appears to be ready to expand its operations in both the US and internationally. It is ready to make some strategic acquisitions and partnerships to offer our hosts and guests services and features that we do not currently offer in-house.
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