Zipcar IPO Is a Startup Success Story

Nearly one decade after it pioneered the car-sharing market, Zipcar is close to achieving a benchmark of startup success by going public. The company said this morning that it plans an IPO of up to $75 million, although it didn't indicate how many shares it would sell or how they would be priced.

The IPO is another step in the maturation of the company, which is based in Boston. It was founded by Robin Chase and Antje Danielson, although it has been run since 2003 by former Boeing executive Scott Griffith, the chairman and CEO. Former Zipcar CEO Chase is now the founder and CEO of goloco.org, a social-networking and carpooling sight. Her husband Roy Russell, the former CTO of Zipcar, is the CTO of the new venture. They also maintain a blog called Network Musings, which is a platform for ideas about transportation.

Zipcar is focused on its member model of car sharing. Under Griffith's leadership, it has tried to enter the European market with the acquisition of Streetcar in April.

For all of its success and popular appeal in cities and college towns, the company faces several hurdles. Major car-rental companies are starting to compete with it. It also has yet to show a profit. It's growing quickly—revenue was up 22.5 percent to $33.24 million during the latest quarter. But on a net basis, Zipcar lost $5.33 million, up from $2.97 million in the comparable period of 2009.

Hertz, Enterprise, and U-Haul now compete with Zipcar, which still controls more than half of the car-sharing market. Its losses might not matter so much if it can reach another startup milestone: selling to a larger rival at a nice premium.