BMW invests millions in a startup that will park your car for you
It's a challenge of owning a car, and luxury car maker BMW has noticed. Its venture arm, BMW i Ventures, announced an investment in ZIRX, a San Francisco-based on-demand parking startup that wants to change the worst thing about city driving.
Neither company specified the amount raised, but ZIRX CEO and founder Sean Behr characterized BMW's strategic investment as "multiple millions." BMW's money influx adds to the $36.4 million Zirx has raised to-date.
The investment from the luxury car maker doesn't mean each Bimmer will come with a valet service, and there are no concrete plans in the works right now, Behr told Business Insider. In the future, though, it's not out of the question that the two companies with a mutual interest in making car ownership easy would work together. One possibility would be a ZIRX app in a BMW dashboard or a valet service for its Getaround rental car competitor, for example.
"With its combination of service and technology that makes it easier for drivers to park and take care of their cars, ZIRX has the potential to be a central component of on-demand services," said Ulrich Quay, managing director of BMW's venture arm, in a press release.
This isn't street parking
To change how car owners park in a city, the 18-month-old startup rents spaces in a number of strategically located garages - they're not just circling the block on your behalf. Instead, both ZIRX and its biggest on-demand parking rival, Luxe, ask car owners to input their destination via an app and then use their GPS location to track the driver's arrival. A valet then meets the driver and takes the car to a secure lot leased by the company.
When the owner is ready to return home, a few taps of the app will have the car returned to their location - and it doesn't have to be the same place they dropped it off. To make car owning easier, each company also offers a bevy of perks like oil changes, car washes and gas fill-ups.
Where ZIRX differs from Luxe is its new focus on the enterprise business and turning on-demand parking into a company job perk. Entertainment events company Live Nation started using the valet service three months ago when it ran out of parking spots in its garage. Other companies are using it as a perk in a talent war to attract employees who may live out of the city and need a reasonably-priced, safe place to leave their car, Behr explained.
It can be hard to convince a recruit to shell out $400 a month for parking when it's free at companies like Google and Facebook.
"It's clearly an HR issue," Behr said.
ZIRX estimates that 25 percent of its business comes from relationships with companies, although it declined to discuss other metrics.
Otherwise, the parking startup is focused on growing its operations as it tries to alleviate parking pains in more cities, Behr said. ZIRX is in six cities now, compared to Luxe's nine markets, and it will need to carve out its territory as parking spots are a fixed (and dwindling) supply in dense cities.
Parking the car isn't the profitable part of the business either, although Behr insists that the company is getting close. The company recently changed its pricing structure from a flat fee to a cost based on zone. Parking spaces in certain spots of the city naturally cost more, so the prices do reflect that, Behr said, although its monthly subscription remains the same.
Instead, it's the add-ons like a car wash that help the ZIRX''s margins and where it will look to expand through partnerships. The competition and venture-backed business necessity already eliminated the pink-blazered Carbon valets from the parking wars as it too tries to pivot to adding delivery into its parking model.
"The barrier to entry is low, but the barrier to success is still really high," Behr said.