Today Chicago-based startup ParkWhiz announced it has closed $2 million in funding, led by Hyde Park Venture Partners with participation from investors including Reddit co-founder Alexis Ohanian, Y Combinator partner Garry Tan, and several others. This comes on the heels of another Chicago-based startup SpotHero’s $2.5 million round last week, and ParkWhiz is one of many companies making waves in the mobile and online parking space.
Founded in 2006, ParkWhiz is similar to SpotHero in that it helps drivers find and reserve parking spots in their city. The company’s co-founder Aashish Dalal is quick to differentiate the company from SpotHero and its other competitors, outlining the fact that while SpotHero is only in two cities right now with plans to expand across the U.S., ParkWhiz is currently available in over 35 cities, and since launching, the company has paid out over $10 million to its partners, which include parking providers as well as companies like eBay-owned StubHub, TicketMaster-owned TicketsNow, and several NFL and NCAA teams (the company reports that it parked 15 percent of the cars at the 2011 Super Bowl in Dallas).
“We’re considered from the industry pundits and everyone sort of the pioneers of this e-parking space that has really frothed up over the last 12-24 months. We see a lot of our regional competitors raising cash, and the differentiator for us is in addition to being sort of the market leader int he space, we have a national presence,” Dalal said in an interview.
Right now the company has an inventory of three million available parking spots in 2,000 lots, and caters primarily to drivers looking for downtown daily parking, and parking at event and entertainment venues. Drivers can search for parking spots online or via the mobile site, viewing photos and a description of each lot, and reserve a spot by entering the time they plan to arrive and the time they plan to leave. The company takes a cut of each spot sold on the site, and pays out its partners via check or wire transfer. After booking a spot, drivers print the parking pass and display it on their dashboard when they arrive, or receive an email receipt if they can’t print the pass. Some of the partner lots accept mobile passes, while other require a printed receipt, a downside we pointed out in the SpotHero article since often people will be looking to book a spot while they’re out of the house and don’t have access to a printer.
Dalal said this is largely an industry problem, and while a quarter of the company’s transactions are processed via mobile devices, not all parking providers are adopting e-ticket solutions, but it’s gaining steam. ”The parking industry itself is undergoing massive changes,” he said. “As the learning curve has accelerated on the parking industry side, the interest level in companies like us…has really ramped up.”
Dalal said the focus for the funding will be expanding to new cities, as well as hiring 20 new employees (they are currently a team of 20) by the end of 2013. Prior to today’s funding the company was bootstrapped, and Dalal calls it a “very healthy, profitable company.”
“Having that breadth of expertise at the table, both on the early stage and as well as on the late stage end, really for us is giving us a lot of confidence on how we’re going to scale this business, and ultimately tip the industry,” Dalal said.
While ParkWhiz has a bigger reach than SpotHero, it’s a similar platform, and the key to either company’s success will be the number of available spaces, the cost of those spaces, and the ease of use in terms of booking via a computer, mobile phone, or any other connected device. This funding should help the company expand beyond their current roster of cities, and work with its partners to build a better system for mobile ticketing, potentially the key to its growth in 2013.