Given that reality, it’s no shocker that parking is an increasingly big business. Globally, annual revenue from the parking management industry is projected to exceed $10 billion by 2030, growing at a yearly rate of 9% to 11%, per research firm estimates.
Startups and their backers are angling for a larger slice of that pie. In the past few years, investors have poured billions in debt and equity financing into companies seeking to streamline the process of finding somewhere to put our vehicles.
That includes funding for ambitious consolidation plays. The largest came earlier this month, when Los Angeles-based checkout-free parking startup Metropolis agreed to take logistics firm SP Plus private in a deal worth approximately $1.5 billion. The purchase represents the biggest M&A transaction of the year by a private, VC-backed company, per Crunchbase data.
Metropolis isn’t the only startup that’s pulled in big bucks around a vision for parking and parking lots. Using Crunchbase data, we compiled a list of companies funded in the past three years, which have collectively pulled in over $2.9 billion in equity financing to date.
Where capital is getting parked
Austin, Texas-based Flash, which describes itself as a “cloud-native parking technology platform,” is among the largest funding recipients. The 12-year-old company has raised more than $315 million to date, including $250 million from private equity firm Vista Equity Partners last year.
Flash is already operating at scale, pitching itself as a tech-enabled revenue-booster for parking operators seeking a more efficient system for collecting payments and tracking utilization. The company says it currently serves over 3 million parkers per week at over 11,000 locations.
Charlotte, North Carolina-based Passport is another mature player. The 13-year-old company has raised over $213 million from venture and private equity backers and is known for working with municipalities to offer mobile and digital parking payment and enforcement tools.
Dallas-based ParkHub, meanwhile, stands out as both a prodigious fundraiser and serial acquirer. The 13-year-old company, with around $120 million in known funding to date, has made at least five acquisitions so far, per Crunchbase data, including the purchase last year of parking data startup Smarking.
Parking cash in the wrong places
Not all wagers on parking-related startups have worked as well.
Miami-based Reef Technology looks like one cautionary tale. The startup raised $1.5 billion in two rounds led or co-led by SoftBank in late 2018 and 2020. After starting out as a parking facility operator, Reef pivoted hard into filling spaces with mobile kitchens that could cook up food for delivery.
The shift hit some hurdles post-pandemic, however, with Reef reportedly laying off hundreds of staff in 2022, following a massive growth spurt. Earlier this year, the company was reportedly working with restructuring advisers.
Before Reef, one of the buzzier parking startups to publicly flail was Luxe, which offered on-demand valet services, and was focused on busy cities where finding a spot can be challenging. The company raised $75 million before going bust in 2017.
Even exits don’t always pan out. For instance, real estate-focused venture investor Fifth Wall sponsored a blank-check company that later carried out a public offering for Mobile Infrastructure Corp., an owner and operator of parking facilities. Since completing the transaction a couple months ago, shares have lost most of their value.
In search of the perfect spot
Looking ahead, we’ll be attentive to whether the current prevailing fundable models, most of which focus on adding tech-enabled efficiencies to parking operations, continue to scale at a promising rate.
At the end of the day, parking is a difficult thing to get right. Either a locale has too many parking lots, rendering it ugly and unwalkable. Or it has too few, leaving drivers circling for public spots or paying exorbitant sums to secure private ones.
To generate the kind of returns their investors’ crave, startups and growth-stage parking companies are probably not going to make those sought-after spaces any cheaper. However, there’s still much to be accomplished in making them easier to find, secure and eventually exit.
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Illustration: Dom Guzman
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