Peer-to-peer motorcycle marketplace startup Riders Share has raised $2 million for its Series A, the company announced Wednesday.
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The round, which was led by LiveOak Venture Partners, will help the Austin-based company expand its team and speed up its product development.
The idea for Riders Share came about seven years ago when co-founder and CEO Guillermo Cornejo was learning how to ride a motorcycle and crashed while going over 80 miles per hour. With all the hospital bills he racked up he wasn’t able to buy a new motorcycle right away, so he looked into renting one. He found out that was an expensive option, with most companies charging around $200 per day to rent. Unable to find a good peer-to-peer option, he realized how much potential there was for peer-to-peer motorcycle sharing.
“They’re extremely underutilized and it’s mostly a toy people use on the weekends,” Cornejo said in an interview with Crunchbase News.
So he set out to develop a better option. The first time Riders Share tried to launch in 2015, it was on mobile, and the team quickly learned that websites were better for advertisements.
The second time they tried to get the company off the ground in 2016, a rider had an accident and the insurance company wouldn’t pay for the costs associated with it, so the company had to shut down again.
The third time, in 2018, was the charm, although in the beginning Riders Share was taking a loss on each ride and Cornejo accumulated $40,000 in credit card debt. But he persisted, knowing that once the company had gathered enough data, it would be able to predict which riders were likely to crash.
Riders Share uses machine learning to predict who might crash and uses that information to essentially underwrite customers and help set rates. It typically costs a customer around $120 total per day to rent a motorcycle on Riders Share. The company sells damage waivers and has a master insurance policy from Lloyds of London.
With the new funding, Riders Share will expand its team, which currently has eight full-time employees, Cornejo said. The company plans on hiring developers and customer service representatives.
Riders Share is available across the United States, and the company wants to grow faster and offer more features, which include expanding into power sports (think peer-to-peer ATV rentals) and allowing hosts to create their own motorcycle tours.
The COVID-19 pandemic hasn’t been easy on Riders Share, as many of the company’s customers are travelers and travel in general slowed down. The company grew by roughly 10 times in 2019 and expects to grow by 5 times this year, but Cornejo said it will more than likely be around 10 percent or 20 percent. The company had approximately $2 million in transactions and nearly $1 million in revenue last year, and has more than 10,000 motorcycles listed on its platform.
Illustration: Li-Anne Dias