Thursday, June 12, 2014

SPOT HERO - How this company landed $4.5M to help you find a parking spot

By | Get In Touch: @sandraguy |  By Business, Grid - June 11, 2014 7:00 am

How this company landed $4.5M to help you find a parking spot


Team SpotHero: Alex Kruger (from left), Elan Mosbacher, Mark Lawrence, Jeremy Smith and Larry Kiss.


SpotHero, an on-demand parking-spot-finder website and mobile app, said Wednesday it has raised $4.5 million — its biggest funding round to date — and plans to hire more employees, improve its product and expand its presence locally and in the Western and Southwestern United States.

The company will also get a new board member: Mike Gamson, a senior vice president of sales at LinkedIn.

It’s an example of Chicago-area natives made good: Co-founders Jeremy Smith, 27, and Mark Lawrence, 28, grew up in Skokie and Winnetka, respectively, and got their first taste of success by winning the Apps for Metro Chicago competition three years ago.

The company, which moved into new headquarters June 1 at 720 N. Franklin St., takes a cut of each parking spot it sells. Smith, the chief operating officer, said the company works with more than 700 parking lots, garages and valets nationwide, and has “hundreds of thousands of paying customers” in seven markets, including Chicago. In Chicago, SpotHero works with 260 parking lots, garages and valet-parked sites.
The other markets are Baltimore, Boston, Newark, New York, Milwaukee and Washington.

Owners of parking spaces post their listings of available spaces for free with SpotHero, and set the prices. Motorists use the website and mobile app for free, and pay the going rate for an available parking space, which Smith said can result in as much as 35 percent savings from a full-price parking spot. The average daily full-price parking spot in Chicago is $32, Smith said.

Smith said SpotHero generates more than $500,000 yearly in incremental revenue for its parking-spot-owner partners, including four of the largest in the country — ABM Parking Services, Impark, LAZ Parking and Chicago-based Standard Parking.

SpotHero, which employs 19 in Chicago and 22 total, aims to expand to new markets such as Dallas, Houston, San Diego, San Francisco and Los Angeles, Smith said.

The company intends to hire an undetermined number of new employees for jobs such as operations, marketing and account managers, and software engineers and mobile app developers.

SpotHero’s new funding brings the 2-year-old company’s total venture capital to $7 million. The latest backers include new investors Chicago Ventures, an early-stage fund headed by Kevin Willer and Stuart Larkins; Bullpen Capital; Draper Associates and 1871 CEO Howard Tullman’s G2T3V venture capital fund.

Chicago Ventures’ Larkins said Tuesday he and Willer were won over to invest in SpotHero because the company has improved its process so that motorists can scan a QR code from their smartphones at parking sites or give an attendant their confirmation number, all without having to use a paper receipt or paper reservation.

Larkins uses SpotHero about twice a week when he drives from his home in Winnetka to the office downtown.

“It’s so convenient,” he said. “I just pop into a location and choose where I want to park. I have my spots picked out at two or three locations near the office.”

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