Having started 2017 off with a bang, SpotHero shows no sign of slowing down.
“We’ve moved into new offices downtown, acquired our largest competitor and we just closed a Series C financing, which makes us the largest company in our industry in the United States and Canada,” said CEO Mark Lawrence. “We were in 20 cities at the beginning of the year, and now we’re in 50.”
On Tuesday, the parking reservation startup announced that it has raised a $30 million Series C round of funding. SpotHero will use the funding for new product development and market share growth.
Founded in 2011, SpotHero makes mobile technology that lets drivers reserve discounted parking spots ahead of time. Lawrence said the company experienced 100 percent year-over-year growth in 2016, and that it has made 53 hires so far this year.
To Lawrence, the growth is a validation of his company’s business model.
“At the beginning of the year, there was a lot of competition from on-demand valets, which were heavily funded by Silicon Valley,” said Lawrence. “Chicago upstarts like SpotHero and ParkWhiz didn’t have as much funding, but now Chicago has emerged as the nationwide leader in the space.”
Luxe, the biggest operator in the on-demand valet space, made headlines this spring when it shut down its service in all current markets. Lawrence said SpotHero is in a far better position because the business is simpler, and because it doesn’t require a lot of labor to scale.
SpotHero will use part of the funding to expand its technological capabilities. Later this summer, the company plans to launch a new suite of mobile operations and payments applications for parking management companies. It is also investing in future-oriented technologies to prepare for supporting autonomous vehicles and being part of smart city initiatives.
“Autonomous parking will be ready long before autonomous driving,” said Lawrence. “And cities are looking at this too, because 30 percent of traffic is caused by people not going anywhere but circling for a parking spot. Imagine if we could eliminate all of that because people knew exactly where they were going to go and how much they were going to pay.”
The parking startup will also use the funding to expand to new markets, grow its presence in existing markets and build new partnerships. Lawrence said SpotHero will be hiring across departments.
Tuesday’s $30 million round brings SpotHero’s total funding to more than $57 million. Its largest previous round closed at $20 million in August 2015.
The most recent round was led by Insight Venture Partners and saw participation from a slew of previous investors as well as Autotech Ventures, which focuses primarily on technology for connected and autonomous vehicles.
“From the time we welcomed SpotHero into our portfolio, we have watched the company emerge as a category leader driven by best-in-class technology and consumer adoption of its mobile application,” said Harley Miller, vice president at Insight Venture Partners in a statement. “We look forward to helping drive future success in this next phase of SpotHero’s growth.”
Lawrence said the fate of a fellow Insight portfolio company, Delivery Hero, might be an indicator of where his company is heading.
“They just went public for about €5 billion, but the funny thing is that before that, they acquired foodpanda,” said Lawrence. “SpotHero just acquired Parking Panda — so I don’t know…”
Image via Built In Chicago.
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