SpotHero Parks $10.1M From Prior Investors To Extend Series C

On Wednesday, SpotHero filed paperwork with the SEC revealing it has raised approximately $10 million in a new round of funding.

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SpotHero is a Chicago-based company which operates the largest parking reservation marketplace in North America. Founded in 2012, the company has parked over 20 million cars to date. It works with 6,000 garages—500 of which are “autonomous car-ready”—across 108 cities throughout the United States and Canada.

We reached out to the company for comment, and spoke with its co-founder and CEO, Mark Lawrence, who told us about the company and its recent round of funding.

First, the financial news. Lawrence confirmed that SpotHero recently closed $10 million 1 out of what will ultimately be a $10,124,000 capital raise. He said that the new funding is sourced exclusively from its existing investors.

In email communication, a company spokesperson characterized this new funding as a “top-up” on the company’s last round, a $30 million Series C from July 2017, which was led by Global Founders Capital.

Lawrence didn’t disclose SpotHero’s valuation, but remarked that it was “up significantly” from its last fundraise. Of SpotHero’s financial performance, he said that the company is growing faster and burning less capital than expected.

Including this new funding, SpotHero has raised roughly $67.6 million in outside capital, according to Crunchbase data.

Lawrence said that the round was initially unplanned. He said that the company’s rapid growth and new SpotHero partnerships—with Hertz, Google Home, Waze, and WageWorks, among others—sparked interest from a number of outside investors. According to Lawrence, these outside investors offered generous terms and an accelerated timeline to close the deal.

But, there was a dilemma. Lawrence said SpotHero wasn’t expecting to raise again until “next year.” And, moreover, he had a base of existing investors with pro rata rights who wanted to re-up their stakes in the company.

Lawrence said he was able to negotiate a deal with his existing investor base, the sole source of capital on this deal. SpotHero’s investors include a number of local names, including Chicago Ventures, Pritzker Group Venture Capital, OCA Ventures, Lightbank, MATH Venture Partners, and others from elsewhere.

Lawrence said that he’s learned a lot about fundraising throughout his time leading the company. “It took us seven months to raise our Series A round,” he said, “and I realized I never wanted to do that again.” He cultivated a network of investors, whom he would update about the company, which he said helped when the company raised again. “When we raised our Series B, we had three term sheets within 21 days,” said Lawrence.

Now, about a year after the company closed its Series C round, Lawrence said SpotHero is positioned to conclude 2018 on a strong note. “We’re growing fast, spending less, and now have a bit of extra cash on the balance sheet.”

Illustration: Li-Anne Dias