Santa Monica-based flexible car leasing startup Fair, launched by Scott Painter in 2016, continued its flurry of acquisitions last week with the announcement that it bought car rental startup Skurt for an undisclosed amount.
Skurt of Culver City, founded in 2014, has raised more than $11 million in venture capital and developed a mobile app for car rentals. The company has no automobile inventory, so it pulls from fleets of traditional rental services, and facilitates the delivery of a requested car to a customer on demand. Skurt’s car rental operations will shut down as a result of the acquisition, but its entire team and its automobile fleet management software will now help manage Fair’s inventory of cars, according to Painter.
“They’ve been focused on making sure they can get cars moved around in real time,” he said. “All of that overlaps with Fair.”
Fair’s app allows customers to use a picture of their driver’s license, bank account information and a digital signature to get approved for what amounts to a short-term car lease. Customers can order a ready-to-pick-up car from any nearby participating auto dealership in minutes and drive it on a month-to-month basis for as long as they want; returning it within five days’ notice.
Fair also announced late last month that it closed its acquisition of Uber Technologies Inc.’s car leasing business, Xchange Leasing, for an undisclosed amount. Xchange leases cars to Uber drivers, so buying the division is intended to help Fair jumpstart its business, Painter said.
“Any business has to acquire customers, and that tends to be expensive and challenging,” he said. “In one transaction, we are able to add 20,000 active accounts.”
The startup secured offers for nearly $1 billion in debt financing in October from a group of institutional investment banks and from an unnamed investment vehicle led by venture capital firm Sherpa Capital of San Francisco. Painter said at the time the debt would allow his company to secure 50,000 cars effectively.
Fair facilitates its flexible leasing program by buying used cars, usually one- or two-years old, from dealerships and bundling most of each customer’s ongoing vehicle costs, including a limited warranty, routine maintenance and roadside assistance, into a monthly payment. Customers also can buy insurance from the firm.
Private Equity Surge Expected
Law firm O’Melveny & Myers added three partners to its M&A practice in Los Angeles in response to what it believes will be an increasing number of private equity deals in Southern California.
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