Stemming the covid-19 tide: Tritium’s RVshare rebounds thanks to safe adventurers

Tritium Partners-backed RVshare, much like most travel businesses, suffered losses as customers cancelled bookings over coronavirus concerns.

But the rental company has since seen a rebound in business as travelers eager to salvage their summer vacations have found comfort in taking their homes with them on the road.  

RVshare is part of PE Hub’s database of companies that are fighting covid-19 by overhauling operations to sustain, survive and, in some cases, thrive. 

Here’s how the online rental company, which scored up to $50 million in committed capital from Tritium in 2018, has navigated through the public health crisis.   

Rough terrain 

RVshare saw a tremendous level of cancellations when covid-19 accelerated early this year, said Jon Gray, CEO of RVshare, a marketplace connecting RV owners with renters. 

The Akron, Ohio, company furloughed one-third of its workers, downsized staff by 10 percent, renegotiated contracts and moved to a delayed payment set-up with vendors to alleviate pressures. 

Besides cutting costs, RVshare launched a new initiative mid-March. The company began renting out vehicles to doctors, immuno-compromised individuals, hospitals and utility companies involved in critical infrastructure work. RVshare refers to these as “relief bookings.” 

“People would essentially get an RV and put it in their property,” said Philip Siegel, managing partner at Tritium. “They would see their family for a bit and then sleep in the RV.”

“We continue to do relief bookings until today [but] the focus of the biz has flipped back,” Gray said. Today, relief bookings make up only 2-3 percent of overall bookings. 

Shifting gears 

When Texas governor Greg Abbott announced the opening of state parks on April 17, “we saw an immediate return to bookings,” Gray said.  

The loosening of restrictions helped allay some covid fears, fueling a rebound in business.

But it was Tritium’s promise to keep the rental service from running dry that prepared RVshare for the spike in demand, according to Gray. Thanks to its backers, RVshare could temporarily operate on a loss, he said.

RVshare had drawn only $20 million from Tritium’s $50 million commitment when the crisis hit. That allowed the company to obtain another $13.5 million in equity from the same pot after covid-19 escalated. 

Without this assurance, RVshare would have been forced to downsize further, as well as cut marketing costs and put a halt to investment in projects.  

Private equity has faced backlash through the pandemic with critics alleging that firms are cashing in on the misfortune of virus-plagued businesses. But the financial wherewithal and expertise of these firms have also come to the rescue of portfolio companies. RVshare, for its part, needed capital to pivot operations and survive.

“Cancellations drained a lot of cash from the balance sheets,” Siegel said. The investment made sure “the company was ready to go back to where it needed to be.”  

Staying the course

As summer rolled in, Americans planning vacations sought to do so in a socially distant manner. In July, bookings nearly tripled compared with the same month a year ago, Gray said.

Cast in the light of covid, traveling by RV is considered safer than overnight stays in hotels. “You are bringing along your own kitchen, bathroom wherever you go,” Gray explained. Leisure RV bookings on the platform were almost zero until mid-April, he said. 

To ensure safety, RVshare asks all RV owners to disinfect vehicles between bookings and adhere to Centers for Disease Control and Prevention guidelines. Renters are also encouraged to clean before returning the vehicles they rent.  

The company has also partnered with IKEA’s TaskRabbit – a freelance labor marketplace – to help RV owners with cleaning. 

The online recreational rental service doesn’t physically check the vehicles themselves. Rather, the costs of cleaning services are borne out of pocket.  

That said, RV owners make 75 percent or more on each booking that’s made through the RVshare platform.   

Road ahead 

With signs of a second wave hitting some US states, there is a looming fear that customers will retreat into the dark covid-19 hole. 

“If the country locks down again we’ll get hit again,” Siegel said. “But now we are confident that there’s a permanent interest and confidence in travelling like this,” he added. 

With hopes of new customers that offer long-term growth prospects, RVshare this year expects to produce five times the revenue it generated in 2017 – a year before the company was acquired.  

For more of PE Hub’s coronavirus coverage, click here

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Action Item: check out the full database of PE-backed companies that have pivoted operations amid covid-19. The information has been supplied by the PE firms, compiled and edited by PE Hub for clarity. 

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