Last week FlightCar, a startup that helps you hire out your car from the airport while you’re on vacation announced it raised $13.5 million in Series A financing.
Yet another entrant into the so-called sharing economy, FlightCar’s generating a lot of buzz because it’s a clear win-win for car owners and would-be renters. As long as you're okay with a stranger driving your car all you have to do is drop it off. Rentals cost less that $30 a day, far cheaper than market rate and car owners can earn anywhere between $25-100 per week with free parking and a car wash thrown in. If you live in a city where you don’t use your car much you could earn up to $500 a month with FlightCar, which limits mileage and is fully insured.
This latest cash infusion takes the total that FlightCar’s cofounders Rujul Zaparde and Kevin Petrovic have raised to $20 million, and Zaparde and Petrovic are still just 19 and 20 respectively, the youngest entrepreneurs to ever raise this much venture capital. Both declined offers from Harvard and Princeton to focus on their startup.
How did they pull it off? The duo say they learned a lot through their experience starting nonprofit, Drinking Water for India when they were just 13 and 14. The project began as a fundraiser at Zaparde and Petrovic’s school to build wells in remote Indian villages and quickly scaled to include about 35 schools in ten states.
Each school fundraised and they’d collect the money and go to India in the summers to build wells. Today they’ve built just over 60 wells, which have provided clean water to over 100,000 people in India. The experience was a crash course in taking a big idea and scaling it.
They wondered if they could do the same with FlightCar.“It really started from a sense of curiosity,” says CEO, Zaparde. “Would people use this? Could we secure the insurance we'd need? Could we pull it off? I think it provided an interesting challenge.”
Getting the first investors on board was toughest, FlightCar was pre-launch with no customers. The idea was met with skepticism because the two had no operations experience yet wanted to start a logistics and operations business. Finding mentors who believed in the model and in Zaparde and Petrovic was key, so was refining their idea in accelerators Y Combinator and Brandery.
“When we raised again after launching and seeing great growth, it was much easier,” says Zaparde. “It took us almost five months to raise our first 600,000, and it took us just 14 days to raise the next 5.5 million - we've definitely seen both sides of the coin.”
Cofounders Kevin Petrovic and Rujul Zaparde are the youngest entrepreneurs to raise $20 million in... [+]
Although their age naturally implied a lack of experience, he says they played to their advantages – not being deeply entrenched in an industry helps you see things differently, you can envisage changes and improvements in a way a seasoned veteran can’t.
“I think we can see issues in a light that others with experience cannot – it's a strength and a weakness,” says Zaparde. “In addition, we have very few responsibilities, and so we can dedicate a lot of our time to FlightCar, usually seven days a week.”
Their advice to others looking to raise financing? Don’t focus exclusively on valuation and terms. “It is important, but what's more important is that you're going to have this person as a mentor and investor for the next x years,” he says. “It's very hard, and you should be prepared for it but, don't think too hard about it - take a risk, and do it - you'll only learn when you take the plunge.”
