The latest financial performance of Turo, a venture-backed peer-to-peer car rental service, was reported this week in an updated IPO filing. The company initially filed to go public in early 2022 and has been updating its S-1 document quarterly in anticipation of an eventual offering. TechCrunch closely monitors these financial disclosures to gauge when the billion-dollar valued startup will make its public debut.
In 2019, Turo secured a $250 million Series E funding round led by IAC, resulting in a post-money valuation of $1.25 billion. According to PitchBook, Turo’s total funding stands at around $500 million. The company has effectively utilized this capital, showcasing strong revenue growth since 2019, positive operating income since 2021, and net profit since 2022.
Despite its positive financial trajectory, Turo’s growth rate has slowed in recent years, making the timing of its IPO uncertain. However, the company’s consistent updates to its S-1 filing suggest that a public offering remains a top priority. Turo’s ability to navigate the current market conditions, characterized by depressed tech valuations, will dictate the optimal moment to go public.
As Turo contemplates its IPO strategy, other prominent startups like Reddit have faced challenges in their public listings. The private market is crowded with billion-dollar companies attempting to access public capital.
2023 Performance Overview
In 2023, Turo generated revenues of $879.8 million, marking an 18% increase from the previous year. While Turo’s total revenue is substantial, its growth rate has considerably slowed in the past two years. The company experienced a significant growth rebound in 2021, with a 213% increase in revenue, followed by a more modest 59% growth in 2022.
Despite the deceleration in year-over-year growth, Turo demonstrated a slight improvement in its Q3 2022 to Q3 2023 growth rate, as well as a higher Q4 to Q4 growth rate. These figures suggest a potential reversal in its growth trajectory.
Although Turo remained profitable in 2023, concerns arose due to a decline in gross margins, operating profits, and net profits compared to the previous year. Turo’s sustained profitability distinguishes it from other tech companies preparing for the public market, but investor sentiment may be influenced by its slowing growth.
Considerations for Delaying the IPO
With robust financial metrics and a valuation exceeding $1 billion, Turo possesses the necessary scale to go public successfully. However, the company may be delaying its IPO to await a resurgence in growth, favorable market conditions, or increased investor appetite for tech offerings.
Recent challenges faced by public comp Getaround serve as a cautionary tale, cautioning Turo to exercise prudence in its timing. Notable updates from Turo’s S-1 include an expanding share of electric vehicles, slower supply growth, and rising interest incomes impacting adjusted EBITDA.
- EVs: Turo’s platform shows a growing proportion of electric vehicles, with an increase from 8% to 9% noted in recent filings.
- Supply growth: Turo’s active vehicle listings have grown at a slower rate, indicating a moderation in supply expansion.
- Impact of interest incomes: Turo’s adjusted EBITDA was affected by rising interest-based incomes, reflecting a broader trend in the market.
The major investors in Turo, including IAC, G Squared, August Capital, and Canaan Partners, hold significant stakes in the company. As Turo prepares for its roadshow and share pricing, further insights will emerge.
