A $20 million investment in SpotHero is just the latest sign of venture capitalists' increasing interest in changing the way the world parks.
Parking is not popular. Anywhere.
Drivers in Nairobi, Kenya, spend more time than anyone looking for the perfect parking spot: a whopping 32 minutes. Things aren't much better, though, in Beijing or Bangalore or Buenos Aires or Madrid or San Francisco.
In fact, from developed countries to developing ones, parking is such a hassle that nearly 6 in 10 drivers worldwide have just given up on it, according to IBM's first and only study of parking conditions in 20 countries in 2011.
Taking the pain out of parking was the driving idea behind Mark Lawrence's business, SpotHero. The startup, whose site and app allow drivers to search and rent spaces in parking garages, has spread to 12 US cities and helped 1.5 million cars find a temporary resting place since launching in Chicago four years ago.
And now, with a little help from Silicon Valley this week, SpotHero might be coming to a city near you.
That's because venture capitalists gave $20 million to SpotHero on Wednesday. The funds will be used to expand beyond New York, Boston, Philadelphia, San Francisco and the other cities where it currently operates.
These money men believe there's a lot of opportunity. Americans are expected to spend $10 billion to park in garages and lots this year, according to market researcher IBISWorld. And that figure doesn't capture the amount spent to park on the street in the US or everywhere else in the world for that matter.
"The basic premise is really simple: parking sucks," said Roger Lee of Battery Ventures, the firm that has invested in SpotHero since it was founded in 2011.
Others in the Valley see things the same way, even though parking conditions and laws vary from city to city. There's also the technological hurdle: the parking industry has been slow to adopt connected meters, self-paying credit card machines or Apple Pay.
Still, Silicon Valley's determined to change the way the world parks. Consider the pattern of its investments: Bets on parking-focused startups have increased every year since 2012, according to venture capital research firm PitchBook. Last year, investments rose to $80 million, up 22 percent from 2013. And, even though we're only halfway through this year, parking startups have already eclipsed last year's figures, collecting $97.5 million.
To be sure, Silicon Valley isn't betting it all on one type of horse in the parking race.
But the investors aren't just giving money to apps that help people find parking spots. There's also Luxe and Zirx, which are built on armies of valets who, with a tap on smartphone app, will come to you wherever you are and park your car. For a fee, Zirx, also pledges to return customers' cars with an oil change. It raised $30 million from investors in April.
Luxe, not to be outdone, says customers can request a car wash from its network of turquoise-clad valets.
Luxe CEO Curtis Lee says demand for his on-demand parking app is off the charts, though he won't say precisely how many cars his valets have parked (he says it's in "excess of 100,000 cars"). Lee says customers use his app two times per week and that the company's revenues have grown at "about 50 percent month over month" since the app first launched in April 2014.
To meet demand, Luxe, which first began operating in cities including San Francisco, Boston and Seattle, is using part of the $20 million his company received from venture capital firms in February to expand to New York, Philly and D.C. among others this summer.
"We're basically trying to take the model that we have and take it to as many cities as we can," said Lee. He believes this type of growth will last for years.
Of course, Luxe will have competition if it does try expanding outside the US, where entrepreneurs aren't waiting for American software to disrupt their own parking problems. Parking startups have proliferated worldwide in recent years. Israeli-based Pango Mobile Parking raised $13 million last September, according to PitchBook. And earlier last year, venture capitalists invested $10 million in Berlin-based CiteeCars.
With all the money Silicon Valley is throwing on parking, how much longer until parking no longer, well, sucks?
It's going to take a lot longer than you think, says Kurt Buecheler, chair of the technology board of industry trade group National Parking Association as well as an exec at StreetLine, a startup that makes software and sensors that help manage on-street parking systems.
"It'll take five to 10 years to solve the problem before we can say, 'Parking is easy,'" he said, before hinting at an even better solution for the world's parking woes: the self-driving car.
"Autonomous cars can also say, 'I don't need to park.'"
F-U-N-D-E-D is a regular column looking -- and sometimes laughing -- at what Silicon Valley has backed in the last week.