CAMBRIDGE, MA, Zagster today announced it has raised $3.5 million in a Series A round of funding to support its rapidly expanding national footprint of bike sharing programs.
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Zagster, the leading provider of private and public-private bike sharing systems, received funding from existing investors, including LaunchCapital; Fontinalis Partners (a strategic investment firm co-founded by Bill Ford); Clean Energy Venture Group; LaunchPad Venture Group; and several leading Boston-area angel investors, as well as a new investor, Otter Consulting.
'With more than 75 programs in 50 cities in 28 states, Zagster is the fastest growing bike sharing company in the country,' said Timothy Ericson, co-founder and CEO of Zagster. 'There's incredible demand for bike sharing in places that simply can't be served by the large, city-wide programs, and we're the only company capable of meeting that demand with our low-cost, scalable, turnkey model.'
In the past year alone, Zagster has increased the number of bikes in its program by more than 300 percent, and projects to increase it by another 300 percent in 2015. In addition, the total number of members is up nearly 250 percent. In expanding from eight states to 28 states, it has doubled the number of employees and recently doubled its office space.
The company counts among its customers leading employers (including General Motors, Samsung, Workday, Quicken Loans and others); several of the top 10 national real estate developers (including Kayne Anderson, Related Management and Irvine Company); several top universities (including The Ohio State University, Duke University, Yale University and Princeton University); and leading hotel brands like Hyatt and The Four Seasons.
Increasingly, Zagster's model of public-private sponsorship is enabling expansion into cities, like Cleveland and Canton (Ohio), Albuquerque (New Mexico), Carmel (Indiana) and Montgomery County (Pennsylvania), that would otherwise not have bike sharing programs.
'Zagster has shown that it can apply the elements of a high growth, tech-enabled business into what has been a capital intensive industry,' said Bill McCullen, Chief Investment Officer of LaunchCapital. 'As a result, they are growing faster and serving more customers and partners -- the type of trajectory that we like to see in our investments.'
Unlike large, city-wide programs that are costly, lock sponsors into long-term contracts and require expensive and complex infrastructure that is hard to upgrade, Zagster's agile, flexible and easy-to-upgrade technology make it possible to be deployed nearly anywhere.
'We see a lot of opportunities in the next-generation mobility space, including bike sharing, and we were attracted to Zagster's long-term, financially viable business model that helps open up bike sharing to previously underserved segments of the market,' said Chris Cheever, Founder & Partner at Fontinalis Partners. 'Zagster has been able to do what no one else in the bike sharing space has done -- be able to show a return on investment and a pathway to long-term sustainability of bike share programs. It's a major step forward for the industry.'
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 a Zagster location, locks it and ends the reservation via the Zagster mobile app or via a simple text message to Zagster.
Founded in Philadelphia in 2007 as CityRyde and now headquartered in Cambridge, Mass., Zagster is the leading provider of private and public-private bike sharing systems. Zagster is uniquely focused on contracting with property managers, hotels, businesses, universities and smaller cities across North America to make bike sharing programs available to tenants, employees, guests, students and residents. 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 at www.Zagster.com.
LaunchCapital 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, MA, New Haven, New York City and Palo Alto. More information about LaunchCapital is available at www.launch-capital.com.
About Otter Consulting
Otter represents the interest of a single-family office in South Florida. Otter's Investment Manager, Mike Wohl, has led Otter's private investment effort since mid-2013, participating in 18 venture deals that span seven major US cities. Working on behalf of a single limited partner, Otter possesses the flexibility to be sector and stage agnostic.
About Fontinalis Partners
Fontinalis Partners, with offices in Detroit and Boston, is a venture capital firm strategically focused on next-generation mobility. The firm was founded by Bill Ford, Ralph Booth, Chris Cheever, Chris Thomas, and Mark Schulz. 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 invests across all facets of the world's transportation infrastructure on a stage-, structure- and size-agnostic basis. Fontinalis is not affiliated with Ford Motor Company. More information about Fontinalis is available at www.fontinalis.com.
About Clean Energy Venture Group
Clean Energy Venture Group is an investment group that provides seed capital and management expertise to early stage clean energy companies. Its mission is to invest in and support early stage clean energy companies that have the potential to mitigate climate change and achieve attractive financial returns. The group is comprised of seasoned operating executives with strong capabilities in the energy and environmental sectors. With each investment, it brings not only capital, but also the value of its team's experience and network to help companies achieve their goals. More information is available at www.cevg.com.