Zipcar’s Returns for VCs

With Avis’ planned $500 million acquisition of Zipcar, venture investors should get back more than they put into the car-sharing company. However, it won’t be a particularly high-multiple exit by venture standards.

The three largest venture investors in car-sharing service Zipcar will collectively walk away a little over $150 million, under terms of the planned purchase, which was unanimously approved by boards of directors of both companies. Of that, the largest share will go to Steve Case, followed by Benchmark Capital and Greylock Partners. The breakdown is as follows:

  • Steve Case: The AOL founder-turned-VC owned 17.3% of common stock, or 6.85 million shares, according to Zipcar’s last annual report. That works out to about $84 million, at Avis’ planned purchase price. Case, who sits on the company’s board, actually started out by backing a rival. His firm, Revolution, acquired a controlling interest in car-sharing provider Flexcar in 2005. Two years later, the company merged with Zipcar.
  • Benchmark Capital: The Silicon Valley firm owned 6.4% of the company, a stake worth about $31 million.
  • Greylock Partners:  The venture firm, which has offices down the street from Zipcar in Cambridge, Mass., owns 5.4% of the company, a stake valued around $26 million.

Overall, Zipcar raised $59 million from venture investors, mostly between 2005 and 2010, according to Thomson Reuters. That does not include the sum Revolution invested in Flexcar.