According to serial entrepreneur Jeff Cavins, more than 35 million people each year look to rent an RV — 38 percent of them so-called millennials. Yet they often walk away from the experience empty-handed. The reason, he says: There are fewer than 100,000 commercially owned vehicles available from traditional rental services.
Cavins says that his San Francisco-based company, Outdoorsy, is beginning to address this issue by enabling owners of the 14 million privately owned RVs in the United States to rent them to users, à la Airbnb.
The vehicles are mostly sitting around collecting dust anyway, says Cavins, who co-founded the company in late 2014 after heading up seven previous companies — two of which were publicly traded.
“Americans desperately want time off, but what happens is they’ll buy a camper van, they’ll use it year one, then use it again maybe one week that second year,” says Cavins. “In the meantime, it’s sitting in storage, with the owner often dealing with both a mortgage and insurance payment. By year three, people go back to the dealership and say, ‘We’re done,’ and the dealer says, ‘I’m sorry but that vehicle you paid $100,000 for three years ago is now worth $40,000.’ ”
Intuitively, the platform would seem to make sense. RVs are unaffordable for most people. Storing them is a hassle. And people are increasingly interested in reaching places where home-sharing sites and hotels cannot take them. Think Burning Man, for example, or the annual Coachella Valley Music and Arts Festival.
But Cavins said venture investors “didn’t get it,” when he began pitching the idea to them several years ago. While he secured meetings with all the right firms, he said he was repeatedly ushered politely out the door by people who deemed the idea too risky.
In fact, Cavins says that he and his co-founder and life partner Jen Young wound up funding the company for its first year. During that time, the platform they created, with two “phenomenal” developers, was compelling enough to attract four term sheets from VCs. He turned them down, though. (“I didn’t want to give my company to them,” he says.) Instead, his next move was to enroll the company in NFX, a venture firm and accelerator that works with a small group of companies each year that are focused on “network effects,” or ensuring that both sides of a marketplace keep coming back in larger numbers.
The time spent in the program paid off, says Cavins. “At NFX, we learned to professionalize the platform. You think about power sellers on eBay and real estate firms on Zillow and property management companies on Airbnb. What we needed was to get [partner companies] on the platform,” which Outdoorsy has begun to do. Outdoorsy has a cross-promotional partnership, for example, with Kampgrounds of America, the network of campgrounds known as KOA, which has roughly 500 locations in North America. “They sell the dirt and space and Outdoorsy brings the hotel room,” says Cavins.
Cavins says Outdoorsy is also finding users through Facebook ads, via word of mouth, as well as through “emerging power sellers,” as Cavins calls them. He points to a single mother in Huntington Beach, Calif., who has acquired five RVs and using them to pay for her daughter’s law school tuition at UC Berkeley. “It’s almost like a cottage industry of folks who are running their businesses on our platform from their kitchen tables,” says Cavins.
Altogether, says Cavins, Outdoorsy now has 256,000 users, and he says it’s growing by 21,000 users a month. RV owners set prices, keeping between 80 percent and 94 percent of the total based on their “trust” ranking scores on the site and on how many vehicles they are renting. (The more they rent, the more they keep.) Outdoorsy separately keeps at least 10 percent of the overall rental price, in part to pay for on-demand insurance, along with unlimited roadside assistance, which it secures for renters through several partnerships.
It’s enough momentum that Outdoorsy, which now employs 50 people, just landed a sizable amount of Series B funding: $25 million led by Aviva Ventures and Altos Ventures, with participation from Tandem Capital and Autotech Ventures. (The latter had chipped into the $6.5 million that Outdoorsy raised previously — much of it from Cavins, who’d also taken earlier checks from NFX, Tekton Ventures and numerous angel investors.)
Even still, Outdoorsy has its challenges, of course. A look at some of the inventory Outdoorsy has unlocked shows a lot of pick-up trucks, which would seem to stretch the definition of recreational vehicle, at least in so far as people would probably prefer not to sleep in one (or visit Outdoorsy expressly to rent one).
And Outdoorsy has Airbnb itself with which to compete. Along with homes and other vacation rentals, Airbnb connects its users to RVs and campers.
Cavins argues that unlike these companies and Airbnb in particular, Outdoorsy’s users “connect emotionally” because unlike with Airbnb, where hosts and guests often never meet, Outdoorsy’s hosts have to meet renters in person in order to train them how to use their vehicles. (He insists that he has seen “families become best friends” and even “people get married” as a result.)
Airbnb has also somewhat famously had issues with renters destroying property. Asked how Outdoorsy handles the same challenge, the company explains that its insurance is “episodic” commercial insurance that covers all states, provinces, jurisdictions and territories. Once a consumer goes through Outdoorsy’s DMV check — the company says its software can do this in 20 seconds — he or she is approved for the insurance and covered up to $2 million for a trip. The insurance protects the owner, the renter and any third party in the event of an accident.
Cavins doesn’t mind being compared to Airbnb, as you might imagine. He suggests that in some ways, the two are very alike, pointing to the two companies’ respective focus on partnerships. Cavins notes that, among other things, Outdoorsy is working with numerous event organizers with the hope that in the not-too-distant future, when a customer buys a ticket to a NASCAR race or to a music festival, that person can also book a parking pass and an RV stocked with a favorite champagne.
It’s down the road right now, says Cavins. But “those partnerships are coming,” he adds.
Two weeks left to score early bird savings at TC Sessions: Space 2020
NASA just made history by landing a spacecraft on an asteroid. If that kind of technical achievement carbonates your glass of Tang, join us on December 16-17 for TC Sessions: Space 2020, an event dedicated to early-stage space startups. We’ve launched early-bird pricing, and $125 buys you access to all live sessions, plus video on […]
NASA just made history by landing a spacecraft on an asteroid. If that kind of technical achievement carbonates your glass of Tang, join us on December 16-17 for TC Sessions: Space 2020, an event dedicated to early-stage space startups.
We’ve launched early-bird pricing, and $125 buys you access to all live sessions, plus video on demand. Don’t procrastinate. Buy your pass now before the early-bird reenters Earth’s atmosphere (and prices go up) on November 13 at 11:59 p.m. (PT).
More ways to save: Go further together with early bird group tickets ($100) — bring four team members and get the fifth one free. We also offer discount passes for students ($50) and government, military and non-profits ($95). Looking for out-of-this-world exposure? An Early Stage Startup Exhibitor Package ($360) includes four tickets, digital exhibition space, a pitch session to attendees and the ability to generate leads. Bonus savings: Extra Crunch subscribers get a 20 percent discount.
TC Sessions: Space is an unrivaled opportunity to learn from, connect and network with boundary-pushing founders, investors and officials from NASA, the Aerospace Corporation, the U.S. Air Force and leading space companies spanning public, private and defense sectors.
We’ve packed the conference with outstanding presentations, fireside chats and interviews. Plus, you’ll find breakout sessions on specialized topics, audience Q&As with Main Stage speakers and the expo area for partners and early stage startups.
Here’s a taste of the topics but keep an eye on the agenda, because we’ll add more speakers and sessions in the coming weeks.
Asteroid Rocks and Moon Landings
Lisa Callahan, vice president/general manager of commercial civil space at Lockheed Martin Space, discusses all aspects of scientific and civil exploration of the solar system — from robots scooping rockets from the surface of galaxy-traveling asteroids, to preparing for the return of humans to the surface of the Moon.
Sourcing Tech for Securing Space
Lt. General Thompson is responsible for fostering an ecosystem of non-traditional space startups and the future of Space Force acquisitions, all to the end goal of protecting the global commons of space. He’ll discuss what the U.S. looks for in startup partnerships and emerging tech, and how it works with these young companies.
Bridging Today and Tomorrow’s Tech
Corporate VC funds are a key source of investment for space startups, in part because they often involve partnerships that help generate revenue, and because they understand the timelines involved. SpaceFund’s Meagan Crawford and Lockheed Martin Ventures’ J. Christopher Moran discuss how these funds fit in with more standard venture to power the ecosystem.
TC Sessions: Space 2020 takes flight on December 16-17, but we’re starting our early bird countdown right now. Great savings disappear in two weeks on November 13 at 11:59 p.m. (PT). Buy your early bird passes today and celebrate your savvy shopping with a tall glass of Tang.
Is your company interested in sponsoring TC Sessions: Space 2020? Click here to talk with us about available opportunities.
Leon Black offers more details on ties to Jeffrey Epstein – Update
Apollo chief executive raised the issue after questions swirled about his relationship with the late financier
Leon Black, the billionaire chief executive of Apollo, on Thursday, 29 October, offered a history of his ties to the late financier Jeffrey Epstein, his most detailed public account yet of a relationship that sparked renewed concern among his firm’s shareholders and fund investors in recent weeks.
Epstein was indicted last year on federal sex-trafficking charges involving underage girls.
On a call to discuss the private equity firm’s third-quarter earnings, Black said he wasn’t eager to speak publicly about his personal business, “but this matter is now affecting Apollo, which my partners and I spent 30 years building, and is also causing deep pain for my family.”
The Apollo chief reiterated that he paid Epstein millions of dollars annually to provide professional services to his family partnership and other family entities, “involving estate planning, tax, structuring of art entities and philanthropic advice” from 2012 to 2017.
He said there was substantial documentation of the work and that it was vetted by law firms, accounting firms and other advisers.
“There has never been an allegation by anyone that I engaged in any wrongdoing, because I did not,” Black said. “And any suggestion of blackmail or any other connection to Epstein’s reprehensible conduct is categorically untrue.”
Black also re-emphasised that Apollo never did business with Epstein, who died by suicide in jail in August 2019, the New York City medical examiner found.
The speech came after the three Apollo board members to who make up the New York firm’s conflict committee last week hired law firm Dechert to conduct an independent review into Black’s business with Epstein. Black said he asked for the review and is cooperating fully.
The moves were prompted by a New York Timesreport on 12 October that Black had paid Epstein at least $50m — more than previously known—in the years after Epstein was convicted in 2008 of soliciting prostitution from a teenage girl.
The article didn’t present any evidence that Black participated in inappropriate activity, but it sparked concern among some of Apollo’s public-pension fund investors and has weighed on the company’s shares.
Apollo’s shares rose briefly after Black’s statement but later fell about 1% in morning trading Thursday, 29 October.
Black, who co-founded Apollo in 1990, said he met Epstein around 1996 when Epstein was advising a number of prominent clients on estate-tax planning. The adviser had been named a trustee of Rockefeller University and served on the Council on Foreign Relations and the Trilateral Commission.
In his network were “luminaries I respected and admired, including several heads of state, heads of prominent families in finance, a US treasury secretary, accomplished business leaders, Nobel laureates, acclaimed academicians and noted philanthropists,” Black said.
The Apollo chief said he wasn’t aware of Epstein’s criminal conduct until it was reported in late 2006 that he was under investigation by state and federal authorities in Florida.
In 2007, Epstein signed a federal nonprosecution agreement, which has since been scrutinised, to resolve that investigation, pleading guilty the following year to two state prostitution counts. He spent much of his 13-month sentence outside prison.
After his release, Epstein went back to his financial-advisory work and once again began associating with prominent people from finance, academia, science, technology and government, Black said. He said he didn’t learn the extent of the further allegations about Epstein’s conduct in 2018 until after he had already stopped working with him.
“Like many other people I respected, I decided to give Epstein a second chance,” he said. “This was a terrible mistake. I wish I could go back in time and change that decision, but I cannot.”
Whether Black’s explanation and the independent investigation will be enough to satisfy the firm’s jittery investors remains to be seen. Working to Apollo’s advantage is the fact that big pension funds, which typically need to invest large sums of money, have relatively few options for where to do so. And Apollo’s funds have continued to offer them strong returns.
Any defections among investors could theoretically threaten the firm’s goal set last year of reaching $600bn in assets over the next five years. For now, growth in the metric is chugging along. The firm said that assets climbed to $433.1bn in the third quarter, up from $413.6bn in the prior quarter and $322.7bn a year earlier.
Apollo chief financial officer Martin Kelly said the firm’s assets were durable even if the independent review of Black has an impact on fundraising. He noted that 60% of Apollo’s assets are in permanent-capital vehicles—pools of money that don’t need to be constantly replenished—and 90% are either in permanent-capital vehicles or funds with five years or longer from inception.
Kelly said the firm expects some of its investors will pause new commitments until the independent review has been completed. But even if Apollo raises no additional third-party capital this year, its fundraising of $18.4bn from third parties through 30 September already falls within its typical annual range of $15bn to $20bn, he said.
“We have incredibly long and durable relationships with our clients,” Apollo co-founder Josh Harris said on the call. “We’re deeply in contact with them, and obviously they are awaiting the results of the review Leon discussed.”
In response to an analyst question about how long the review would take, Apollo said it hoped the process could be completed by the end of the year, but that it was in the hands of the conflict committee.
Apollo also reported lower net income and distributable earnings for the quarter. It posted net income of $272.4m, or $1.11 a share, down from earnings of $363.3m, or $1.63 a share, a year earlier. The decline was primarily driven by a bigger loss attributable to noncontrolling interests.
Fee-related earnings were a bright spot, climbing 30% year-over-year.
Apollo invested a net $20.9bn across its various investment platforms during the quarter, a metric that reflects investments in vehicles beyond traditional drawdown funds.
The firm said it would pay a dividend of 51 cents per share versus 50 cents a share for the third quarter of 2019.
Write to Miriam Gottfried at Miriam.Gottfried@wsj.com
Alternative Investments/ESG: Brunel Allots £1.2B ($1.55B) Sustainable Mandate To Three Managers
The Brunel Pension Partnership has picked Ownership Capital, RBC Global Asset Management, and Nordea Asset Management to manage its new Sustainable Equities Fund of around £1.2 billion ($1.55 billion). Brunel is one of eight pooled Local Government Pension Scheme funds in the U.K.
Alternative Investments/ESG: Brunel Allots £1.2B ($1.55B) Sustainable Mandate To Three Managers
The Brunel Pension Partnership Limited (Brunel) launched a new Sustainable Equities Fund for local authorities’ pension funds.
The Brunel Pension Partnership has picked Ownership Capital, RBC Global Asset Management, and Nordea Asset Management to manage its new Sustainable Equities Fund of around £1.2 billion ($1.55 billion).
Brunel is one of eight pool Local Government Pension Scheme funds in the U.K.
The sub-fund mandate is on behalf of 10 local government pension scheme funds. They wanted a listed equity portfolio with a pronounced skew in favor of ESG considerations. The emphasis would be on companies with positive ESG performance rather than negative exclusions. (Institutional Asset Manager)
Multi-manager sustainable fund
Brunel shortlisted the three managers from 70 expressions of interest.
“The three managers we appointed share a broad investing style and a prioritization of sustainability, yet their approaches are also different enough to provide clients with the diversification they were looking for,” said David Cox, Head of Listed Markets at Brunel.
“We were delighted to find managers who share our understanding of sustainability, embedding it deep into their culture and investment processes,” says David Jenkins, Portfolio Manager for the Sustainable Equities Fund. “This portfolio, therefore, meets our aspiration to go beyond traditional Responsible Investing and ensure that the managers are engaged with the companies and are investing in them for positive reasons, not simply focusing on negative exclusions.”
The portfolio is significantly underweight to the GICS energy sector. It also features an aggregate carbon intensity that is significantly lower than its benchmark, the MSCI All Country World Index.
The selected managers will integrate ESG considerations into their whole investing process. Their focus will not be to manage ESG risks – rather to positively seek out exposure to companies on a sustainable path.
In the process, they would also generate a suitable financial return.
Related Story: Insurers Take a Fancy To ESG & Sustainability ETFs (Invesco)
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