The Getaround car-sharing platform is shopping around for a buyer as the coronavirus pandemic kills demand for its services, Bloomberg reported Friday (March 20), citing sources.
The Softbank-backed startup had been valued at $1-plus billion, but travel-related businesses have been financially decimated as COVID-19, the disease caused by the coronavirus, forces people indoors for both school and work, and outdoor gatherings are reduced or banned.
Getaround was one of the biggest firms in the car-sharing space, giving users the ability to rent their personal vehicles to others for set periods of time. The Silicon Valley startup said it had 5.5 million customers using its platform.
Without a buyer or a cash investment, the company could move in the direction of seeking bankruptcy protection, according to one of the sources.
Aside from being backed by Softbank’s Vision Fund, Getaround also received funding from Menlo Ventures and Toyota Motor Corp.
“Like many other businesses, we are dealing with the impacts of the COVID-19 outbreak, both in the U.S. and Europe, and we are evaluating the appropriate steps to manage this unprecedented event,” a Getaround spokeswoman told Bloomberg in an email. “This includes the support of our investors.”
Lacking a safety net and usually not yet profitable, startups have been especially hard-hit by the economic fallout due to the pandemic.
SoftBank’s startup portfolio is causing more anxiety than usual. Pandemic aside, founder Masayoshi Son has been under fire for funding risky ventures that have lacked profitability.
Due to the coronavirus pandemic, Getaround instituted policies to keep people safe and encourage use. The company waived charges if people canceled reservations and quarantined any vehicles exposed to the virus.
“Our service remains essential to our communities by providing flexible and safe access to transportation, and we are working to ensure it continues to be available during this time,” a Getaround spokeswoman told Bloomberg in a statement.
In related news, Uber halted the option for pooled rides in the U.S. and Canada as one way to curtail the virus. Pooled rides give users the ability to save money by traveling with as many as three other riders.
