NEWS PROVIDED BY
MGV Capital Group
Oct 19, 2021 07:58:00
Car subscription startup Go raises $41M seed round to build fleet, hire in Philadelphia
Philadelphia car subscription startup Go raised a $41.25 million seed round on the heels of its official launch in Greater Philadelphia and Florida.
New York-based private equity firm Synterra Capital Management led the round, with participation from Hudson Cove Capital Management
“If you want it to provide customers a far better experience at a better price, you’ve got to do the hard thing,” Beauchamp said. “So we’re doing the hard thing. But when you do the hard thing, you’ve got to raise capital a little bit faster.”
Beauchamp declined to disclose the company’s valuation.
The startup, which offers a short-term car subscription with no down payment, went live last week. Go is now available in metros like Philadelphia, Pittsburgh, Allentown, Atlantic City, Camden and Wilmington, as well as other major cities in New Jersey and Florida.
Go offers up to three-year terms for a car with a flat monthly subscription rate. The startup charges a $495 restocking fee for customers who want to return their car before the three-year term is up. The restocking fee is waived if the customer keeps the car the full three years.
“We’re better for the person that’s really looking for a daily driver for multi-year use but wants the simplicity that has not come along with the traditional financing process,” Beauchamp said.
Users can select the make and model of car they want, with options ranging from Toyotas to BMWs, along with their choice of color and their expected monthly mileage. Customers then go through a credit check – they need to have a minimum score of 700 – and a driving record check. Go delivers the car to users for free, unless they live more than 50 miles from a major airport.
Go owns its fleet of several thousand cars, Beauchamp said. The startup deployed several hundred vehicles in Philadelphia earlier this year for its pilot program. Go outsources delivery and vehicle storage to third-party transportation logistics company Acertus, which helps it to scale fast, he said.
Beauchamp started Go last year after he and his wife moved to the Philadelphia area from New York in search of more space and a better cost of living. Greater Philadelphia ended up being a great place to start a business because of its immense talent pool, he said.
“I think that Philly has a lot going for it that I’m not sure that your average founder is aware of,” Beauchamp said.
Go is operating out of the Life Time Work coworking space in Suburban Square. Beauchamp wants to hire 30 to 40 “almost exclusively local” employees in technology, data science, marketing and finance, but there will be some positions in the other markets Go operates in. The startup is looking to launch in Atlanta, Charlotte, Dallas and Houston by the end of the year, Beauchamp said.
A self-proclaimed car owner with a “short attention span,” Beauchamp said he would switch cars more frequently than the typical driver. The former advertising executive hated haggling with salespeople over prices, hours of paperwork, financing the transaction and getting a hard credit pull, so he sought to make the process of getting a car more streamlined.
“I just felt that the way that we would get a car hasn’t changed or evolved much when the way that we get everything else in life has changed a lot,” he said. “We can order pretty much anything we want on the internet these days, with the exception of a car, at least in the manner that we do.”