Zipcar: IPO or No, a Big Year Ahead

zipcarWe can tell you this much about car-sharing company Zipcar’s plans for the next year: It expects to “cross over into profitability.” That’s what Zipcar spokesperson Nancy Scott Lyon told us in late April, shortly after the company launched its fleet management service, and it would be a huge milestone for the decade-old Zipcar. But this week the brouhaha about Zipcar, the country’s largest car-sharing company, has to do with whether or not it plans to seek an IPO (something the company has discussed for over a year now) sometime in 2010. For later-stage startups in the clean technology and transportation space like Zipcar, with still-evolving business models and an eye on an eventual public offering, the year ahead — which could bring the first signs of thaw to the frozen IPO market — will be a crucial one to watch.

Based on an interview with Zipcar CEO Scott Griffith, Bloomberg wrote this week that Zipcar is “gearing up to publicly sell shares in 2010.” According to Bloomberg, Griffith also said that he expects sales to reach $120 million this year and hit $1 billion within a decade. But yesterday Lyon, the Zipcar spokesperson we spoke with earlier this year, told The Deal: “We did not announce an IPO and have no immediate plans to go public.”

That doesn’t precisely rule out non-immediate plans, like say, sometime in the next year and a half. We’ve contacted Zipcar to help clarify the company’s plans, and we’ll update when we have an answer. In the meantime, we expect there’s probably an element of wait-and-see here: The company might intend to seek a public offering in 2010 in a best-case scenario, but it may be waiting to see how the market — and its new fleet management business — shake out.

Some firms expect public offerings to pick up speed next year. As Fidelity Investments president Mark Haggerty said in a recent release about the mutual fund’s new deal with private equity firm Kohlberg Kravis Roberts (Fidelity will sell shares of KKR initial offerings to retail customers): “While it’s no secret that the IPO market has slowed over the last couple of years, we are beginning to see signs that it may be picking up momentum.”

According to a Forbes article this week on the IPO market, those signs of momentum include a few 2009 offerings that have performed well, but that doesn’t mean the market is ripe for developing companies to go public. Rather, it’s a good time for mature, “best of breed” companies to start considering an IPO.

Zipcar may be on the edge of that group: It’s big and growing, with at least 275,000 members in more than 25 states and provinces across North America. But Zipcar really only began to hit its stride two years ago, when it began focusing on college campuses. And its fleet management tool, which employs a software-as-a-service model and could provide a highly scalable source of revenue that Zipcar needs to become profitable, is barely a month old.

So while Zipcar as a car-sharing service is among the more mature startups out there, Zipcar as a profitable mobility enterprise remains in the development stage. (For a deep dive on how electric cars could jumpstart “mobility as a service” models, check out our Long View on the subject in GigaOM Pro, subscription required.)

If cleantech investor Steve Westly, managing partner of the venture firm The Westly Group, is right that the recent public offerings of two venture-backed startups signal a changing appetite for companies going public (he thinks Tesla, Silver Spring and Solyndra will be the next cleantech IPOs), then Zipcar could be getting some signs by early next year about the appetite for initial offerings, and for its new service.

Image credit Zipcar

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