The term sharing economy usually describes a peer-to-peer marketplace for goods and services. The most successful example of a company utilizing the sharing economy is Airbnb. They are a multi billion dollar hotel company that does not own a single hotel. They are in the news everyday for things like raising money or expansion. After reading that you can rent your home or apartment out to earn extra money people ask why they cannot do the same thing with cars? Well, you can, but no company has yet reached the level of success with that model like Airbnb has. The two main companies in the space are Turo and GetAround. Both raised capital from major investors. And their business model is a peer-to-peer car rental marketplace. Neither are break away winners though. It seems there is a new player who is entering the market soon who has their eyes set on that goal. Helbiz, started by Salvatore Palella, plans to launch next month. I spoke to him about how he got to where he is, and where he sees things going in the future.
The New York based vehicle sharing company's tag line is "Share Your Wheels". And that is exactly what they plan to help people do. The company is creating a marketplace to rent cars, motorcycles, and bicycles. Only weeks ago ago Salvatore raised $1.3 million from undisclosed investors. He is very excited to get things moving with this company, and is confident in the future success of it. Most entrepreneurs would get scared seeing big competitors. Salvatore sees them as validation of his idea though. Though competitors do exist there is no clear winner in the market for this business model. And knowing that is exactly why he is going after the market opportunity right now.
This is not Salvatore’s first foray into entrepreneurship. In his teens he started a vending machine company called Witamine. The company was in his home country of Italy. It served fresh squeezed orange juice. It grew to be successful in a short period of time. He started manning a few vending machines himself. Within a few years he had hundreds of them around the country. He grew the company till he sold it a few years later. Salvatore does not come from a wealthy family. All the success of Witamine was through opportunities he created for himself. By the time he was 21 years old he had a thousand employees. Sometime after he decided to sell the company when he got an offer that was too good to refuse. After selling the company to a larger organization he needed to figure out what he would do next though.
At this point Salvatore had more money than ever before, but no idea what to do with it. The thing he did know was that he did not want anyone else managing his money. So he decided to make managing what he made his full time job. That is when he started a money management fund called Palella Investment. He took losses in the beginning when he was learning best practices, but that did not last too long. At first he was managing only his own money, but over time other people started to invest with him as well. In only a few years he grew the company to be one of the most successful firms in Europe. Recently though he wanted to set his sights on a new venture, and that is where he got the idea of Helbiz.
The sharing economy is something that always intrigued Salvatore. He loved the idea of people making extra money through a peer-to-peer marketplace. He loved reading how people would lease more than one vehicle to use them as investments. These people were creating their own private taxi fleets using Uber and Lyft. All around it was exciting to see. After seeing that he stated searching for cars that allows people to rent their own cars out. That is when he found Turo and GetAround. Neither of them had won the marketplace though. At that moment he started strategizing what he needed to do to start that company.
While he knows his competitors have raised over $100,000,000 Salvatore is not unworried. When asked why he said it was because unless people are in tech they have not heard of the other companies in the space. But when he talks about Airbnb people are more than well aware. Most have even used Airbnb in the past. As someone with the heart of an entrepreneur he sees that as an opportunity more than anything else.
Helbiz is set to launch in May. It will release on iOS and Android at the same time. The app will allow people to rent their cars out hourly, daily, weekly, or monthly. In allowing hourly rentals it is creating a competitor for Zipcar. It is also a competitor for Turo and Get Around. Both provide a sharing economy marketplace for car rentals. One place this differs from them is that Helbiz also allows you to rent motorcycles and bicycles. Cars is not the only option. The company was able to raise capital with plans to raise more in the future. Investors are lining up, but Salvatore wants to wait till it’s the right time. He knows raising too much money when it is too early can hurt you in the long run.
Right now he is focusing on making sure the tech is where it needs to be. Also, he is taking the necessary meetings to have an insurance underwriter. The insurance issue is the most onerous thing starting a company like this. Aside from those two major issues Salvatore is in the middle of doing everything a new company needs. He is creating road maps, looking at potential hires, setting up social media plans, and so on. From the simplest things to the most difficult, he is handling it. But he is confident that things will go well.
The most successful entrepreneurs tackle the biggest problems head first. Years ago who ever thought it would be possible to be the biggest hotel chain without owning a hotel? Well, what is to stop a company from being the biggest car rental company without owning a car? Right now, that is the mission Salvatore is on with Helbiz. While his past successes do not mean this venture will go well, he does have a track record worth betting on. So keep an eye out for what might be the next big thing in the sharing economy.
Disclosure: I was not financially compensated for this post, but I do work for Helbiz. The opinions are completely based on my own experience, research, and conversations.