Digital carsharing marketplace Getaround will go public via a merger with special purpose acquisition company InterPrivate II Acquisition Corp. in a deal announced May 11. The deal will allow Getaround to expand its carsharing offerings in an attempt to disrupt the traditional car ownership model.
The pro forma equity value of the combined company is about $1.2 billion. According to the filings, the deal is expected to produce between $225 million and $434 million in gross proceeds. This includes the up to $175 million commitment from global investment firm Mudrick Capital Management, L.P., which is backing InterPrivate, to help Getaround with its global expansion plan.
The filings say that Getaround “provides an instant and contactless digital carsharing experience” by allowing car owners to rent their car to people nearby and earn money while their car would have otherwise been parked. The platform is used in “more than 950 cities in 8 countries” with 66,000 active vehicles. Moreover, the filing states that in 2021 the company had $167 in gross booking value, $81 million in net marketplace revenue and a 52% trip contribution margin.
“Getaround is one of the two largest players in the global car-sharing market that it helped pioneer,” Ahmed Fattouh, Chairman & CEO of InterPrivate said in a press release. We are proud to partner with such an established leadership team founder-led and bolstered by top executives with experience across leading Silicon Valley companies.”
Getaround states that it continues to grow “through a combination of increasing adoption by entrepreneurs who own multiple vehicles, as well as highly scalable partnerships with car hailing apps such as Uber and planned native integration with OEMs such as Toyota.” The company believes it is well positioned to disrupt the market, particularly the traditional car ownership and transportation models. The company states the serviceable addressable market is estimated to be $155 billion.
The deal is expected to close in the second half of the year. Upon closing, the combined company will be listed on the New York Stock Exchange under the GETR ticker symbol. The combined company will be led by Sam Zaid, the founder and CEO of Getaround.
“Getaround is about empowering people everywhere to share cars and making the sharing experience increasingly simpler and more reliable through the use of digital and connected technology,” Zaid said in a press release. “We are accelerating a much-needed transition from a legacy, analog car rental experience to a fully digital and keyless carsharing experience. The transaction with InterPrivate is pivotal to our long-term growth strategy. Proceeds will be used for continued product innovation, to densify the supply of digitally connected cars in our existing markets, and to increase both the mix and proximity of our cars and trucks for consumers. We will also look to bring our proven model to new markets, both domestic and abroad.”
The deal also includes a no-shop provision. Additionally, the company anticipates the net transaction proceeds will provide enough funding to achieve adjusted EBITDA breakeven for its current business plan.
Fattouh added, “Getaround has demonstrated years of strong execution as evidenced by their robust growth, established scale, and demonstrated adjusted EBITDA profitability in key cities. Our merger is expected to accelerate the expansion of the Company’s uniquely enduring asset-light marketplace within one of the largest consumer categories, providing more efficient mobility for global consumers along the way.”
Getaround is represented by Orrick, Herrington & Sutcliffe LLP. Meanwhile, Greenberg Traurig, LLP is serving as legal counsel to InterPrivate and Morgan Stanley & Co. LLC and EarlyBirdCapital, Inc. are serving as financial advisors to InterPrivate.
