CAMBRIDGE, MA, Company that provides bikes-as-a-service, today announced it has raised $1,000,000 in funding, led by LaunchCapital and including Fontinalis Partners.
Zagster, a company that provides bikes-as-a-service, today announced it has raised $1,000,000 in funding, led by LaunchCapital and including Fontinalis Partners, a strategic investment firm co-founded by Bill Ford and focused exclusively on next-generation mobility companies. Several leading Boston-area angel investors, including John Landry and Jean Hammond (an early investor in Zipcar) also participated. The funding will help the company accelerate a national rollout of its turnkey bike sharing service aimed at the hospitality, real estate and employer markets.
"It's a great milestone for Zagster and an affirmation of our business model to have LaunchCapital, Fontinalis and leading angel investors believe in the vision of our company," said Timothy Ericson, co-founder and CEO of Zagster. "Because of our highly efficient, low cost model, we can launch bike sharing services in more places more quickly and complement the exploding public bike sharing industry in cities around the world."
Zagster is developing a national footprint of bike sharing programs in partnership with real estate/apartment companies, businesses, hotel chains and universities, all of whom are looking to provide value added services and benefits to tenants, guests and employees.
Zagster's model complements the public bike sharing programs launching in major cities around the world. According to UC Berkeley researcher Susan Shaheen, as of May 2012 there were an estimated 184 bikesharing programs in 204 cities around the world, with 368,600 bikes at more than 13,600 stations on 5 continents and 36 countries.1
"We love the simplicity of the Zagster model -- that they can serve the places the big city programs can't while benefitting from the existence of those programs," said Bill McCullen, a Director in the Boston office of LaunchCapital. "We believe they can leverage the overall growth in the bike sharing industry while finding highly profitable segments to drive customer and revenue growth."
Zagster differs from public bike share systems, which are typically designed for short, one-way trips. Zagster focuses on users who need the bike for longer periods of time and/or who are making round trips because the bikes are at the places they live, work and visit.
"Because of increasing urbanization, more vehicles on the road, aging infrastructure, and budgetary challenges for governments, we're seeing a revolution in mobility technology and an immediate need for better mobility services in cities around the globe," said Chris Cheever, Founding Principal at Fontinalis. "At Fontinalis, we look to invest in and scale the brightest stars of next-generation mobility, and Zagster fits that mold. We're extremely excited about this team and the elegant solutions they offer."
Zagster members use their mobile phone to receive a code to unlock the bike at the time of the trip. The same lock that locks the bike to the host location can be used to lock the bike during the trip, something that most city-wide programs do not allow because their bikes must be locked at official docking stations. At the end of the trip, the member returns the bike to its original location, sends a simple text message to Zagster, and re-locks the bike.
Zagster will use the funding to accelerate national rollouts by hiring sales and operational support staff, as well as advancing its bike sharing platform technology. It is building a national network of suppliers and service professionals to ensure rapid deployment and ongoing responsive and high quality service. Zagster's goal is to be able to streamline operations such that it can place a fleet of bikes just about anywhere in the country within a week of a signed customer agreement.
"Zagster enables its customers to quickly, easily and cost-effectively participate in the new sharing economy," said Jean Hammond, an angel investor in Zagster and one of the early investors in Zipcar. "They are at the front end of a trend that will re-shape urban transportation in the coming years."
Founded in Philadelphia in 2007 as CityRyde and now headquartered in Cambridge, Mass, Zagster is one of the nation's first bike sharing companies. Zagster is uniquely focused on contracting with property managers, hotels (including Hyatt), businesses, and universities across North America to make bike sharing programs available to tenants, employees, guests and students. This highly efficient and unique model allows Zagster to offer services in areas that traditional city-wide bike sharing systems can't reach. More information about Zagster is available online at www.zagster.com
Launch Capital was founded in January 2008 with a mission to help entrepreneurs gain quick access to seed capital and mentorship. With investments in over 100 companies, LaunchCapital has a core focus in technology, consumer and medical businesses. The nine-person team has syndicated investments with over 50 venture firms and 1000 angel investors. They currently have offices in Cambridge, Mass., New Haven, New York City and Palo Alto.
About Fontinalis Partners
Fontinalis Partners, with offices in Detroit and Boston, is a leading transportation technology strategic investment firm founded by Bill Ford, Ralph Booth, Mark Schulz, Chris Cheever and Chris Thomas. Fontinalis' mission is to leverage the firm's considerable management experience, market access, strategic relationships, international expertise, and background in transportation innovation to scale companies providing next-generation mobility solutions. Fontinalis Partners invests as a strategic partner across all facets of the world's transportation infrastructure on a stage, structure and size agnostic basis. Fontinalis Partners is not affiliated with Ford Motor Company. More information about Fontinalis Partners is available at www.fontinalis.com.