Venture capital exuberance for the sharing economy has found a new beneficiary. BlaBlaCar, the European ride-sharing startup, raised $100 million in Series C funding led by Index Ventures, along with Accel Partners, ISAI and Lead Edge Capital.
BlaBlaCar provides a free matching service for drivers who have empty seats on their way to a destination, and would-be passengers who would like a lift. Drivers can charge a fee that offsets their cost, but the company sets standards so people don’t make a profit. This system works particularly well in Europe where people usually have to buy expensive train passes to travel between cities and countries.
While Paris-based BlaBlaCar might seem much like Silicon Valley sensations Lyft or UberX, it’s different because BlaBlaCar users are simply sharing excess capacity, rather than setting out to make money from a flexible gig. I wrote more about that last year.
BlaBlaCar now has 8 million registered members and 1 million monthly active passengers. It operates in Belgium, France, Germany, Italy, Luxembourg, the Netherlands, Poland, Portugal, Russia, Spain, the Ukraine and the United Kingdom. It has 150 employees, with many of them spread out to help run local operations in those countries.
The company recently had an unexpectedly successful launch in Ukraine and Russia, said COO Nicolas Brusson, where BlaBlaCar bought a startup called Podorozhniki, and translated its European ride-sharing service to work with VKontakte authentication instead of Facebook. In the first three months, 250,000 people joined.
“For Europeans, what we do is create new cool low-cost way to travel,” Brusson said. “In Russia, you can fly around but it’s very expensive, or take the train but it’s expensive, slow, and doesn’t connect everything. So we end up providing not just a lower-cost service, but a lower-cost service that connects cities that were never connected by any means of public transport.”
Brusson said BlaBlaCar doesn’t have any plans to launch in the U.S. — where geography, gas prices and cultural attitudes might be a problem for its model — because the size of the opportunity is so large elsewhere.
He also admitted he was surprised by the size of the venture capital round, having hoped to raise $25 million from investors who last gave BlaBlaCar $10 million in 2011, but interest was strong and more money means more local teams in more markets.
While today BlaBlaCar only makes money in the few countries where it provides an online payment option and takes a transaction fee, Brusson maintains that he’ll eventually be able to build a big business because of the size of the opportunity.
“With $20 you can ride 300 miles on BlaBlaCar — or [using Uber] with $20 you can go from London to London and spend 10 minutes in a car,” he said. “One is used by a lawyer or banker; the other is used by the other 99 percent of the population.”