Turo Abandons IPO Plans Amid Market Changes and Decelerating Growth
Introduction
Turo, the online car-sharing platform, has withdrawn its plans for an initial public offering (IPO), marking a setback in its long-anticipated public debut. The decision follows a challenging period for the company characterized by slowing growth and a changing market landscape.
Background
Founded in 2010, Turo has positioned itself as the "Airbnb for cars," allowing private car owners to rent out their vehicles to registered users through its website and app. In January 2022, the company filed for an IPO, aiming to raise capital and expand its operations. However, the IPO conditions shifted unfavorably soon after the filing.
Market Factors and Growth Deceleration
The IPO withdrawal reflects the impact of several market factors. The economic downturn and rising interest rates have made it more challenging for companies to attract investors. Additionally, Turo’s growth has decelerated, with its peak growth now behind it. In the nine months ended September 2024, the company reported revenue of $722 million, an 8.6% increase from the same period in 2023. However, this lags behind the $879.7 million in revenue generated during the boom period of 2022.
Peer-to-Peer Car-Sharing Shutdown
The Turo IPO withdrawal comes just one day after peer-to-peer car-sharing company Getaround announced the closure of its U.S. operations. Like Turo, Getaround began as a venture-backed company but went public in 2022 through a merger with a special purpose acquisition company (SPAC). However, Getaround faced similar challenges to Turo, including slowing growth and profitability concerns.
Current Status and International Presence
Despite the IPO setback, Turo continues to operate in the United States and internationally. As of September 2024, the company reported 150,000 active hosts globally, 350,000 active vehicle listings, and 3.5 million active guests. Turo’s international presence includes Canada, Australia, and France.
Financial Performance
Turo has achieved profitability since 2022, but its profits have not recovered to the levels reported in 2022. In the nine months ended September 2024, the company reported net income of $123 million, compared to $168 million in the corresponding period of 2022.
Industry Outlook and Competition
The withdrawal of Turo’s IPO underscores the challenges facing the peer-to-peer car-sharing industry. Economic headwinds and increasing competition from traditional car rental companies have put pressure on these platforms. Additionally, the regulatory landscape is still evolving, with cities and states considering regulations that could impact Turo’s operations.
Conclusion
Turo’s decision to withdraw its IPO plans reflects the impact of market changes, growth deceleration, and competition. While the company continues to operate and expand internationally, it faces an uncertain path forward. The IPO withdrawal has raised questions about the future of the peer-to-peer car-sharing industry and the role Turo will play in it.
