Banged up my Jeep driving on flooded roads yesterday. All the rental car agencies were closed so I found this Mercedes SUV on @turo Top Gun holding $IAC owns 27% plus a warrant for another 10% pic.twitter.com/Q6Kt8DtT35

— Top Gun Financial (@TopGunFP) January 1, 2023

On New Year’s Eve, the roads in San Carlos were flooded and I banged up my Jeep Grand Cherokee. It was undrivable and I wanted to go out that night. The rental car agencies were closed so I found a Mercedes SUV on Turo only a block away from my apartment. The platform was intuitive and the process a breeze. It wasn’t cheap but I loved the car and it put Turo on my radar.

Turo is the Airbnb of rental cars. Just like Airbnb allowed homeowners to monetize spare rooms and second homes – disrupting the hotel industry – Turo is doing the same for car owners. In a column in Monday’s WSJ, Ben Eisen wrote about Turo – and Getaround – and mentioned that Turo is expected to IPO (“Rental Cars Are The New Airbnb”).

(Click on image to enlarge)

The only way to play Turo via the public markets is Barry Diller’s conglomerate IAC which owns a 31% stake plus warrants. I first wrote about IAC in November 2022 when I read a WSJ Heard on the Street article by Laura Forman. The stock is up by 1/3 since then but I still think there’s a lot of hidden value.

In his most recent shareholder letter, IAC CEO Joey Levin included Turo’s annual income statement from its most recent amended S-1 at the time. (An S-1 is the form companies that want to go public file with the SEC). In 2022, Turo had $747 million revenue, $80 million Adjusted EBITDA and $155 million Net Income. Revenue is growing exponentially, from $469 million in 2021 and $150 million in 2020. In other words, Turo may really be the next Airbnb, and owners of IAC could be handsomely rewarded as its IPO gets on investors’ radar.

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