Posted on Wednesday, Nov 4th 2015
There has been a surge of funding from VCs that has been driving the meteoric growth in valuation for car sharing firms including Uber and Lyft. I have my reservations on valuations of these companies. But then, there are companies like ride-sharing BlaBlaCar that have managed to enter the Billion Dollar Unicorn club while avoiding the accompanying regulatory heat and by being able to develop a scaleable model that caters to today’s shared economy model.
Paris-based BlaBlaCar was founded in 2006 by Nicolas Brusson, Frédéric Mazzella, and Francis Nappez to broker out ride sharing between French cities. The idea behind BlaBlaCar was born when Mazzella was trying to get home from Paris to western France during Christmas and could not get a train ticket. The founders then got together to build a platform that would be able to connect passengers with drivers for long distance rides.
Unlike Uber and Lyft which are more of taxi companies, BlaBlaCar is a carpooling service. Users of the service mention their destination and departure city along with a basic profile that includes certain personal traits such as tolerance towards pets or how chatty they are on a range of Bla to BlaBlaBla. The platform then matches the riders with the available trips posted on their site by drivers. Users can then search the site to select their preferred time and price and get their car ride. At the end of the car ride, riders and passengers can even rate each other. BlaBlaCar’s carpooling model helps them avoid falling under the category of a taxi company.
Today, BlaBlaCar has expanded to over 19 countries and has a user base of over 20 million globally. Since they offer carpooling, the company is able to offer really low cost rides to their members. The passenger’s price is a contribution for their seat, and drivers cover their fuel and toll costs. BlaBlaCar drivers do not make a profit and only share costs. According to their data, average trips booked through their platform are nearly 220 miles long and are priced as much as 30 times lower than a regular Uber ride. BlaBlaCar believes that they are competing with regional bus lines and train services and are not really competing with taxi services.
The company has expanded their footprint in Europe with several acquisitions in Italy, Poland, France, and Russia. In April this year, they announced the acquisition of Germany’s Carpooling.com and Hungary’s Autohop. Both these companies offered similar services in their countries. The acquisitions have helped them add 5 million members and establish a bigger presence in these countries. Carpooling.com has been the oldest player in the trade, having been established back in 2001. But, they were also BlaBlaCar’s biggest competitor and the biggest player in Germany. Autohop has helped BlaBlaCar establish their presence in Hungary, Romania, Serbia, and Croatia. They are now focusing on emerging markets and have expanded outside of Europe into India, Mexico, and Turkey.
BlaBlaCar earns money by taking a commission ranging from 10%-15% on a ride in only a few markets including France, Spain, and Portugal. Their detailed financials are not disclosed.
BlaBlaCar has been venture funded so far with $335.6 million in investments from Accel, Cabiedes & Partners, Index Ventures, Insight Venture Partners, Isai, Lead Edge Capital, and Vostok New Ventures Ltd. Their last round of funding was held in September this year when they raised $200 million at a valuation of $1.5 billion. BlaBlaCar wants to use these funds to expand their presence in other geographies. They are not currently exploring US as a market due to the vast rail network and the availability of comparatively cheaper cars and gas prices in the country.
More investigation and analysis of Unicorn companies can be found in my latest Entrepreneur Journeys book, Billion Dollar Unicorns. Unicorns will also be discussed with some special guests during our 1M/1M Roundtable programs over the next few weeks. To be a part of the conversation, please register here. The term Unicorn was coined in a TechCrunch article by Aileen Lee of Cowboy Ventures.
This segment is a part in the series : Billion Dollar Unicorns
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