Zipcar is the lead investor in a $13.7 million Series A round of funding for Wheelz. As Zipcar does not have majority ownership in Wheelz, Zipcar will account for its investment under the equity method of accounting and expects to record its share of Wheelz’ net loss on this basis in the amount of approximately $1 million in 2012, which was factored into the guidance Zipcar provided in conjunction with the release of its 2011 fourth quarter results on February 14th. There will be no impact to Zipcar with respect to revenue or Adjusted EBITDA.
Also participating in the round is Detroit-based Fontinalis Partners, a transportation technology strategic investment firm. Mark Schulz, 30-year automotive industry veteran, and former president for International Operations at Ford and founding partner at Fontinalis, will be joining Scott Griffith on the Wheelz board. Also joining the board is Jim Freer, former vice-chairman of Ernst & Young.
Scott Griffith (Chairman and CEO, Zipcar): Based on our analysis and primary research, we believe P2P could expand the total addressable market for car sharing.
Wheelz has designed its car sharing platform specifically to meet the needs of campus communities by connecting students who own cars with students who need them. The model empowers car owners to earn money from their car when they are not using it while providing access for car borrowers to get the vehicle they need for any occasion including errands, shopping excursions, dates and weekend trips.