French Company BlaBlaCar Raises $100M to Make Ride-Sharing Easy
The makers of the popular European ride-sharing app BlaBlaCar have raised $100 million in venture funding, one of the largest venture investments in a French startup on record.
BlaBlaCar cofounders Francis Nappez, Nicolas Brusson (seated) and Frédéric Mazzella. BlaBlaCar.com
Index Ventures led the Series C investment in ComutoSA, the Paris-based company behind BlaBlaCar, joined by earlier backers Accel Partners, French fund ISAI and Lead Edge Capital. Executives and investors declined to disclose the valuation.
Venture investors put $1.03 billion into French startups in 2013, according to Dow Jones VentureSource. BlaBlaCar’s $100 million financing represents nearly one-tenth of last year’s total, but was bested by a $130 million investment in music-streaming service Deezer in 2012.
Founded in 2006, BlaBlaCar’s app lets travelers find drivers heading where they need to go soon and connects them by mobile phone or email to arrange to share the ride.
The average ride booked via BlaBlaCar is 200 miles long, with drivers offering seats for an average price of 16 U.K. pounds ($25) or less. The fee partially covers the cost of fuel, tolls and other expenses. The app suggests pricing so passengers and drivers don’t have to spend time haggling.
The pricing feature has another purpose: prohibiting drivers from generating profits on the rides they give. This is distinct from apps that let users summon a driver on demand, such as Sidecar, UberX and Lyft, which all promote the idea that everyday drivers can make a living using their platforms.
BlaBlaCar hasn’t drawn the same regulatory heat as other ride-ordering apps, co-founder and Chief Operating Officer Nicolas Brusson said. Some groups representing private bus and limousine services, however, have voiced protests to the idea of a paid carpool marketplace.
To foster trust within its user community, BlaBlaCar asks passengers and drivers to rate and review each other, as buyers and sellers do on the auction site eBay. Top-reviewed community members who have given or taken a lot of rides tend to draw a faster response when they use the app.
Six years after it was founded, in 2012, BlaBlaCar raised $10 million in a round led by Accel Partners.
The BlaBlaCar mobile app. BlaBlaCar.com
Since the company’s early days, when Chief Executive Frédéric Mazzella said the company was seen as idealistic, the cost of car ownership, fuel and travel in Europe–and elsewhere–has risen, while smartphone and mobile app use has become pervasive.
Accel’s Philippe Botteri said that while favorable market conditions contributed to investors’ new confidence in BlaBlaCar–a startup raising $100 million will be expected to deliver a multibillion exit, he said–more important was the company’s ability to scale its business globally. Accel is the company’s largest shareholder.
With about 150 full-time employees today, most of them in Paris, BlaBlaCar has established operations and grown its business in 11 new countries since 2012, according to its founders. The company also increased its total registered users to 8 million from 1.5 million in a few years. One million users share rides each month via BlaBlaCar.
Three years ago, the most popular routes traveled via BlaBlaCar users were all within France, its native market. Now that the service is available in Benelux, France, Germany, Italy, Poland, Portugal, Russia, Spain, Ukraine and the U.K., its list of most-traveled routes spans several European countries. A route’s popularity will vary by day of the week and seasonally, the co-founders said.
BlaBlaCar plans to use its funding to grow its business within the nations where it operates and expand to Turkey, Brazil and India, Mr. Mazzella said.
Index Partner Dominique Vidal, who joined the board of BlaBlaCar with his company’s investment, said the startup has been following a “recipe” for global expansion, finding the best local businesses already involved in city-to-city ridesharing and “acqui-hiring” those teams in new countries, making them part of the BlaBlaCar brand, platform and team in full.
BlaBlaCar employees at company headquarters in Paris, France. BlaBlaCar.com
BlaBlaCar has an opportunity to make revenue, but also to make a social and environmental impact, the investor said, where transportation infrastructure doesn’t provide an affordable and reliable way for people to travel from city to city, and where the “cost of motoring” is prohibitive to most citizens and travelers.
The company has no plans or need to focus on the U.S. market, Mssrs. Mazzella and Brusson said. They explained that in the U.S. the cost of car ownership and fuel is still relatively low, so many city-to-city travelers or commuters have a ride of their own, or one they can easily rent or borrow.
Otherwise, U.S. geography and topography make longer-distance ridesharing less appealing, they said. The distance between U.S. cities is so great that many travelers have to book a flight to reach their destination in time, they said.
In fact, Lyft and others have tried but failed to popularize pay-to-carpool marketplaces in the U.S. Lyft rebranded and sold its carpooling business, ZimRide, to Enterprise Rent-A-Car Co. last year to focus on its ride-hailing business.
BlaBlaCar’s primary competition includes Carpooling.com GmbH in Germany and Avego Ltd., a younger startup in Ireland that does business under the name Carma and focuses on intracity trips.
Write to Lora Kolodny at email@example.com