Turo has a new strategic partner in automaker Daimler, with ties solidified through both an investment by Daimler in the car sharing startup, and through the acquisition by Turo of Croove, Daimler's own Turo-like subsidiary.
The funding is part of a new $92 million Series D round raised by Turo, which was also led by South Korean giant SK Holdings, in addition to Daimler, and which includes participation from new investors Liberty Mutual Strategic Ventures and Founders Circle Capital, as well as from existing partners.
This investment includes a lot of new strategic tie-ups for Turo, which allows individual vehicle owners and small rental fleet operators to offer their cars up for short-term rentals by others. Liberty Mutual is clearly a key asset thanks to its insurance industry perspective, and this deepens the relationship between the two companies, since Liberty already provides insurance for cars on Turo's sharing platform.
SK Holdings has a number of sub-companies, including SK Telecom, with ties to the automotive industry, and they've also recently been investing heavily in new mobility brands. These include SoCar, as well as leading short-term car rental services in other Southeast Asian manufacturers like Malaysia. They represent a partner with potentially far-reaching impact for Turo.
"They have several SK companies that are involved closely with OEMs," explained Turo CEO Andre Haddad in an interview. "They provide parts and systems for car manufacturers based in Korea, as well as global manufacturers of cars. Recently, they started investing in mobility services. They found that Turo, with our global perspective, and they're keen on positioning themselves in what they believe is going to be a significant part of how people access, buy, sell and finance cars in the future."
Haddad points out that the number of cars on the road is fastest growing in Asia, and he says SK also invested because they believe they also can help with Turo's Asia expansion plans in general.
Daimler's investment is unique, since it also comes alongside Turo's acquisition of its Croove business. Croove, which launched in December last year, was a car-sharing business that Daimler fully owned, which launched in Germany initially. It offered a very similar model to Turo, allowing anyone to rent their vehicle on a peer-to-peer basis, and it was open to vehicles of any make and model.
"We had a lot of interest from a bunch of OEMs in this round, and we had great conversations with a lot of those OEMs," explained Haddad. "One of the things we particularly liked about Daimler was that they were not just talking the talk, they were walking the walk with their direct investment in incubating and launching Croove. We do believe that our platform Turo and peer-to-peer car sharing is fundamentally going to evolve car ownership and we believe that partnering with an OEM that has already expressed their deep interest and belief in this phenomenon by building their own business with Croove was a differentiator."
Once the investment in Turo by Daimler was agreed upon, Haddad says it made no sense for the automaker to continue to operate its own separate peer-to-peer car sharing business, hence the decision to put Croove in Turo's hands. As to why it went that way, when a lot of OEMs seem to be going in the other direction and acquiring younger mobility startups, Haddad says it's about recognition on both sides of how the model works.
"For peer-to-peer car sharing to be really successful, it needs to be operated within an open platform where anyone can participate," he said. "We believe very strongly that peer-to-peer marketplaces are only great when they are open and accessible. I think there was mutual recognition of this fundamental nature of peer-to-peer marketplaces, and I believe that's the reason why Daimler are also very clear on this dynamic."
Haddad said the details of how the transition will work in practice are still being worked out, but the plan is not to operate separate brands for long, and to launch Turo in Germany in place of the Croove brand in a matter of "weeks and months," not years.