Sharing economy startup BlaBlaCar raises $100m

LAUNCHPAD: The long-distance lift-sharing platform could be valued at $1bn - and it isn't even profitable yet.

by Rachel Savage
Last Updated: 04 Nov 2015

Venture capitalists think there’s big bucks to be made in the sharing economy, the catch-all name for companies that get people making money off their underused resources. Room rental site Airbnb is reportedly valued at $10bn (£5.8bn), while taxi challenger Uber could be worth an even more eyewatering $17bn.

The latest company to jump on the VC bandwagon is BlaBlaCar, a platform that sets up long-distance lift shares. It has just raked in $100m in a funding round led by Index Ventures, which previously backed Dropbox, King and Just Eat, while existing investors Accel Partners, ISAI and Lead Edge Capital have also chipped in. Although the deal’s details are under wraps, it could value the company at more than $1bn (using funding rounds of a similar size as a comparison).

BlaBlaCar now has 8 million members across 12 countries, with 1 million of those sharing lifts every month. That’s a steep increase from the 330,000 monthly active members it had this time last year, but the company took a while to get going, having been founded in France 10 years ago.

Passengers only pay to cover fuel and running costs, as well as a 12% BlaBlaCar commission, meaning the driver’s insurance isn’t compromised. Drivers can’t turn lift shares into a career, then, like Airbnb hosts and Uber drivers do. It does mean co-founder Nicolas Brusson gets to claim his company is a ‘true’ sharing community, albeit one that doesn’t yet turn a profit.

‘Why would you let strangers into your car?’ is the obvious question many have about lift-sharing, though. Like many sharing economy sites, BlaBlaCar relies on a system of driver and passenger ratings, as well as verifying people are who they say they are (and getting people to own up to their chattiness - ‘Bla’, ‘BlaBla’ or ‘BlaBlaBla’?).

With Uber irking coddled taxi drivers in cities around the world, transport is definitely ripe and ready for disruption. The head of France’s national railway SNCF has even said BlaBlaCar is now one of its biggest competitors. It also has the worthy side effects of bringing down the fuel costs and the loneliness of the long-distance driver and cutting CO2 emissions from unnecessary journeys. What’s not to like?

Find this article useful?

Get more great articles like this in your inbox every lunchtime