Peer-to-peer car sharing company Getaround said Thursday it will acquire the assets of HyreCar, another car sharing marketplace, for $9.45 million. Getaround expects to collect up to $75 million in annualized run rate gross book value from the deal, which the company believes will contribute to positive adjusted EBITDA profitability.
“At this acquisition price, we believe this deal will deliver strong long-term value to Getaround stakeholders,” Sam Zaid, CEO and founder of Getaround, said in a statement.
Getaround’s stock rose 135% in aftermarket trading on the news, reaching a high of $0.80. That spike still wasn’t enough to bring Getaround back into line with the New York Stock Exchange, which issued a delisting warning in January because the company’s stock price traded below $1 for a period of 30 trading days.
Getaround first debuted in the public markets in December after merging with a special acquisition company. Shares of the combined company started trading at about $10 a share, but promptly plummeted. To date, Getaround’s stock has lost 96% of its value.
Since early 2023, Getaround has received separately delete warnings from the NYSE because the global market capitalization over a 30 trading day period was less than $50 million and because the did not file a timely report with the US Securities and Exchange Commission.
Getaround has still not reported Q4 and full year 2022 results, despite the fact that we are well into Q2 2023 and other companies are now reporting Q1 results. A company spokesperson said the delay is because Getaround is “finalizing a highly technical post-SPAC accounting process and audit” and expects to report “in the coming weeks.”
Until then, the best insight we have into Getaround’s financials is the “selected preliminary unaudited financial results” for 2022 that reflect the company shared on March 31, according to which Getaround ended the year with $64.3 million in cash and cash equivalents. That money will likely be used to fund the HyreCar acquisition; Getaround said it will pay the startup in cash and expects the deal to close on May 16.
Getaround has historically pursued a strategy of aggressive scaling, which has given it a network that Getaround says is 20x larger than its nearest competitor. However, this scale comes at the expense of sustainability. According to Getaround’s Q3 2022 results, the company’s revenues declined and operating expenses increased for the first three quarters of 2022 compared to the prior year.
The acquisition of HyreCar could result in a similar result, giving Getaround scale and reach and ultimately increasing operating costs.
HyreCar’s assets include access to its community of tens of thousands of gig drivers, but that healthy demand was part of why HyreCar went out of business. Company Reportedly had more demand than access to vehicles and had tried to solve that problem by entering into a joint venture with AmeriDrive, a major fleet manager. That deal fell through, followed by an $8 million bond transaction that never closed and mounting legal fees due to a series of lawsuits and investigations. HyreCar filed for bankruptcy in February.
Used car dealer Holmes Auto had agreed to buy HyreCar for $7.75 million, but Getaround outbid the company at auction earlier this week.
HyreCar brings other assets to the table, according to Zaid, including extensive user data and strong risk management solutions. We monitor how the purchase contributes to Getaround’s financial and operational costs over the long term.
