Zipcar, one of the world's leading car sharing companies, has announced that it plans to sell shares as a way to expand operations and cover company debt. Zipcar has filed an estimated $75 million initial public offering (IPO) with the Securities and Exchange Commission. The company hopes that additional funds will help it get a jump on competitors in the rapidly growing car sharing business.
Will the IPO be a success? Who knows, but Zipcar's past problems could lead to some difficulties as it looks to go public. Way back in 1999, the Zipcar company burst onto the scene as one of the world's first car sharing services. In the last 11 years, the company has secured more than 400,000 customers along with a fleet of 7,000 cars and offers its services in three countries including the U.S., UK and Canada.
Though Zipcar claims that the industry is surging, the company has struggled to stay afloat. Year after year, Zipcar has reported losses including nearly $4.7 million last year alone. Just last week, the company arranged for $70 million in debt financing from two banks. The company has faced other problems too, which you can read about here, here and here, but Zipcar has high aspirations and this car sharing thing does make a lot of sense in many places... so maybe the company just needs some more money to make its dreams a reality and climb up out of the red.
[Source: Green Car Advisor, Securities and Exchange Commission]