Point of View
Over the past few years, venture capital (VC) money has begun to flow into the parking industry. The funding does one of two things. It either allows a company to survive and grow, or it funds rapid growth through acquisition. We have seen both.
The recent purchase of ParkingSoft by T2 Systems is the most obvious. In 2016, T2 was acquired by Thoma Bravo, a venture capital firm. The additional funding brought to T2 enabled it to purchase ParkingSoft, plus expand its existing operations.
But this isn’t all. Companies such as Spot Hero, Passport, Honk Mobile, ParkWhiz, Smarking, ParkMe, ParkX (now part of Passport), just to name a few, have received VC cash. Do you see anything similar about them? These companies are software-based. They attract venture capital that is used to supplying money to Silicon Valley startups. They understand this type of company.
But, in general, what does this mean to our industry? First of all, these money guys have considered that investment in parking isn’t a bad bet. These are companies that will grow in an industry that, although changing, will grow.
Is there disruption going on? You bet there is. Any one of these companies could cause large changes in our industry.
T2 may become a force in all aspects of the industry, on- and off-street. SpotHero, Canada’s Honk Mobile, ParkMe (now part of Inrix) and ParkWhiz could change the way people find and buy off-street parking space. Passport is a leader in pay-by-cell technology. And now they have the money to continue to disrupt.
You might note that I haven’t listed a legacy revenue control company (although TIBA received a cash injection last year). The VC money seeks out companies that are on the cutting-edge not only of technology, but also how that technology is used.
Who would have thought that we would be reserving parking spaces from our smartphones? Somebody with big bucks did.
If you remember a couple of decades ago, commercial banking organizations spent a lot of money on parking operators. Allright and Central in the U.S., and NCP in the UK were the three largest that attracted moneyed buyers. But in every case, the companies ended up being sold at fire sale prices. Is anything different happening now?
I think so.
With a couple of exceptions, the companies are not being purchased outright. Money is being invested, mentors are being placed on boards, and the companies are being allowed to continue with the leadership basically intact. After the second or third round of funding, changes in management may occur. But by then the VC companies have been able to learn about the companies they have funded and know the direction they should be taking.
Another difference is age. The management of the parking operators was older, established, difficult to mold or change. These companies listed above have young gun founders. These are men and women from the trenches who actually write and debug code. They understand the benefits and limitations of their product, and believe in it.
In a very few years, the way companies in the parking business are funded, started and grow will continue to change. I asked the question five years ago where the VC money was for parking. It was waiting. The wait is now over.
When “an agenda” underlies a major effort, sometimes it’s very deep, and one must clean away a lot of clutter to find it. When the goal is basically to do away with privately owned vehicles and replace them with everything from feet to bicycles to autonomous vehicles to buses to rapid transit, one might begin to panic.
It may be true that the personal vehicle isn’t as cost effective as any of those methods of transportation, but there is one factor, at least in the U.S.: People love their cars.
I have a friend who just told me that if he could get to work on public transport, he would sell his car instantly and use alternative means of transport. Fair enough, but I don’t think that’s a reality, in his case, or in most cases.
Over the past two weeks, his car has been in the body shop. It was a fender-bender. During that time, he was driving a rental pickup (he hated it) and a mid-level Toyota. He finally got his bright red BMW 3 Series back, and I caught him in the parking lot dusting it off and muttering about dust and dirt. He loves that car.
And why not? It’s a beautiful machine. And it’s his.
But there are cars in my neighborhood that are five years old, not expensive, that are treated like children. Washed and waxed weekly, driven with care, and owned with pride. It may be difficult to own a house, but most everyone can own, and love, a car.
A privately owned vehicle means freedom. It means coming and going when you want. It means there is something substantial that is yours. And no one can take it away from you. Or can they?
After a short hiatus, PT is on the road again, and over the next few weeks we will be in Indianapolis, Atlanta, Asheville, Palm Springs, Montreal, London, Rotterdam and Sydney. These communities host conferences dealing with parking, “smart” cities, and transportation. We will report on all.
For those attending the National Parking Association extravaganza Oct. 2-5 in Palm Springs, CA, Eric, Astrid, Marcy and I will be there. Drop by our booth, and we will talk parking.