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Peer-to-Peer Carsharing – Angel Investment Seed Round

Peer-to-Peer Carsharing – EXECUTIVE SUMMARY

Business description:

Problem: There are 4,000,000 cars in Buenos Aires and 6,000,000 in Sao Paulo, all of which sit parked 22 hours each day.

Solution: Instead of buying a car, you can rent one from someone nearby or as car owner you can earn up thousands dollars each year, by sharing your car.

Objective: to become the first carsharing brand to become regionally known. The Peer-to-Peer model allows us to grow the company maximizing those fits that made traditional carsharing work: price (cars can be rented by the hour, not possible in the region so far) and convenience (the value of the service increase proportionally to the number of cars located nearby).

Income model: users can rents cars from 5 dollars per hour and car owners can make 5,400 dollars every year, in average. The company charges 20% for the service and insurance costs 20% in total.

Business model regional adaption: our hypothesis is that a hardware plus smart phone app model, as it operates in the US, would not work locally. We believe that a text message plus Internet solution will allow us to access the market completely.

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Team:Director – Germán Rimoldi

Industry: Collaborative Consumption / Asset Sharing pivot on the Car Rental / non public transportation industry.

Currency:American Dollars (U$S)

Number of employees:Prototype launch: 3By the end of the 1st year: 30By the end of the 3rd year: 150

Partnerships:To launch our prototype we work jointly with Localiza (the largest locally owned car rental company in Buenos Aires and Sao Paulo) based on results.

This gives us access to their their complete idle fleet (from 90 to 240 cars) on 5 geographical areas of Buenos Aires city and allows us to gain traction with out negotiating with an insurance company (as they are their own insurance company).

Fund raising:8,000 Seed Round U$S (Prototype)


One line Pitch:We enable car owners to safely rent out their underutilized cars to a community of trusted drivers and drivers to access a personal car experience, with out the need to buy one.

Pitch:Car owners invest huge amounts of time and money into an asset they barely use. Cars are driven only 8% of the time, while potential drivers walk past block after block of underutilized cars.Average income being approximately 20% of the average on in the United States and cars being 80% more expensive compared to that country, we expect the value for a convenient carsharing experience to be higher.Sao Paulo city’s GDP surpasses Argentina, Uruguay and Chile’s combined. Buenos Aires GDP represents more than 50% of Argentina’s GDP. The higher price of cars, public transport mal functioning and the regulatory changes that limit cars input in the city raise the compared demand for the service in price and quantity.

Traction:Our prototype is to be launched using the idle fleet of the largest locally owned car rental company. By partnering based on results, we get to launch as the first car sharing company in the city, using up to 240 cars having spend 0 marketing dollars to get this. Additionally, our partnership allows us to launch the concept without the need to negotiate with a local insurance company (as Localiza is it’s own insurance company and takes care its this cost).

Team:Germán Rimoldi (CPA)

Advisors (social proof):Guillermo Dietrich (Secretary of Transportation Buenos Aires City, Owner of Localiza Rent a Car).

Business model:The car owner sets the price, availability and location. The car renter uses the system to match her own expectations regarding these three variables and the existing car offerings.The system facilitates money transaction between both parties. Refueling, maintenance and insurance is responsibility of the owner. The cost of the fuel is estimated taking difference between the initial and final mileage for the rental applying an average per car category. The amount is deducted from the user’s credit card.

The system provides user verification (log in is only allowed through facebook, license and driving record are verified against the identity of the user). The community of car owners gets to review the user to influence responsible usage. To enforce responsible usage set of rules and fees complement the relationship between the parties.

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Insurance is offered to cover the asset and the user. It only applies when the car is being rented and the original insurance provider continues its coverage for the car is not. What makes the insurance contract unique is that it is paid as its used and that the car owner is not to be held responsible in case the car is involved in an accident while being rented.

For a P2P model to be implemented in Buenos Aires and Sao Paulo a law regulating its usage has to be passed by each province to regulate insurance mediation.

Business’ metrics:The average car owner rents his car on average up to 1.25 hours a day, at 12 dollars an hour, earning 60% of the total income (still we expect the average car rental period to be for a complete day) – estimating income per car uploaded to the system to be around 5400 dollars a year (20% of this goes to insurance, 20% to the company).

Variation on the model:On the side of the user to car owner interaction our system is designed to have both parts to actively swap keys and car inspection. Compared to other companies performing this service in the developed world we expect car owners to refuel (during the prototype Localiza will perform this activity themselves).

Marketing PlanOur prototype’s marketing plan consists on saturating one geographical section of Buenos Aires city. We’ll do that by adding bumper stickers to cars (members of the community or not) and by placing adds on public places. We expect these activities to give us an initial base of users and car owners that will then come to grow by WOM and social marketing.

Market: Our markets are Buenos Aires and Sao Paulo. Sao Paulo city’s GDP surpasses Argentina, Uruguay and Chile’s combined. Buenos Aires GDP represents more than 50% of Argentina’s GDP. The higher price of cars, public transport mal functioning and the regulatory changes that limit cars input in the city raise the compared demand for the service in price and quantity.

Competition:There are currently no carsharing companies in Buenos Aires. Sao Paulo has a company with niche model carsharing Company named Zazcar. NEITHER both cities have a P2P carsharing proposition, which on our perspective is the right model to implement in the region.

Time line:Prototype: October 2011 (concept testing, negotiation with insurance and carsharing law passing)/ Buenos Aires launch: April 2012 / Sao Paulo launch: October 2012

Investment planI expect to close one initial round to pilot the concept by October 2011. Since it’s hard to valuate the company at this stage, I prefer to either raise little funds for

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equity or to complete a seed round raising funds on convertibles notes or a bridge loan. From the prototype I expect to be able to valuate the company reasonably and to raise funds to launch the concept on Buenos Aires city by April 2012. Financial Forecast (Buenos Aires and Sao Paulo):

Year: Year 1 Year 3 Year 5 Income $ 104.000 $ 1.092.000 $109.200.000

Earnings $ -180.000 $ 109.200 $ 16.100.000Number of cars on the system 240 1.050 105.000% Net income/ Revenue 20% 20% 20%% Earnings / Revenue Negative 10% 15%

Total investment (prototype and launch): 126.000 u$s.Seed round: 8.000 u$s (complemented with a partnership with a software development company).

o Three months salary;o Brand registration costs;o Bump stickers purchase, merchandising and local ad display; o Initial website design;o Office space and company registration, on the investor.

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