Zipcar Backs Barcelona Car Sharing Startup, Inches Further Into EU

Zipcar has bought a minority stake in car sharing startup Avancar, with an option to increase its ownership share in the Barcelona, Spain-based company during the next year, according to a release from Zipcar on Friday. This represents the first concrete step Zipcar has revealed toward its goal of expanding beyond the U.S. and Canada since setting up a car sharing network in London, England in 2006.

This week’s investment comes more than two years after Zipcar absorbed its largest competitor: Seattle, Wash.-based Flexcar, owned by AOL co-founder Steve Case. The merger resulted in a company with 180,000 subscribers and more than 5,000 vehicles in 48 cities — three times the size of Flexcar, as the Seattle Times reported at the time. Since then, Zipcar has grown to 350,000 members and 6,500 vehicles in cities and college campuses throughout throughout 28 provinces and states in North America.

By comparison, Avancar — owned by Catalunya Carsharing — has built up a small network over its four years of existence. The company serves 3,500 customers around the Barcelona metro area, with vehicles in 39 locations. Some 20 percent of those clients are “businesses and administrations,” an area where Zipcar is trying to expand its presence (in April, Zipcar launched a fleet management service for enterprise customers). Like Zipcar, Avancar rolls insurance and fuel costs into the hourly rental fee, and customers unlock their reserved vehicle using a swipe card on the windshield (see video below).

Avancar also equips each vehicle in its fleet with a small computer and keypad below the rear-view mirror that allows drivers to make reservation changes and contact customer service reps when they enter a PIN, and which handles the mileage and fueling data (Zipcar has drivers manually enter odometer information at the gas pump). Zipcar skips the keypad and custom interface, but installs “black box” devices (a custom circuit board, processor and modem) on its vehicles. Both Zipcar and Avancar transmit vehicle data to servers over mobile phone networks.

According to a statement from Zipcar CEO and Chairman Scott Griffith in the release, Zipcar is “impressed with the progress Avancar has made during their start-up phase in Barcelona,” and he hopes to help build the company. “We are looking forward to working with Avancar to help Barcelona realize the full economic and environmental benefits of car sharing,” he said. We have not gotten a reply to our requests for comment from Zipcar, but it seems likely the company assessed the opportunity in Spain and decided it may be more efficient to invest in the established player (Avancar claims to be Spain’s first car sharing operator) rather than starting from scratch as a competitor in that market.

At 10-years-old, Zipcar has discussed plans to seek an initial public offering since at least last year. And in June, while Zipcar said it had “no immediate plans to go public,” it was reported to be targeting an IPO for 2010.