Parking can often feel almost laughably old-fashioned, with some lots still hiring an attendant to collect fees and check for valid tickets. Even when parking lot owners try to modernize — using an app, for example, or a credit card machine to take payment — they must deal with a whole array of providers to manage hardware, payment processing and marketing, all separately.
That’s where AirGarage comes in. The company works with parking real estate owners and offers a full-stack software and management service for their lot or garage. That means handling everything from installing signage to collecting payments, and even providing parking enforcement.
AirGarage already has more than 200 locations across 30 states under its management. To scale its services even more, the startup has just closed a $12.5 million Series A led by a16z, with participation from existing investors Floodgate, Founders Fund and Abstract Ventures.
The company’s undergone a number of pivots since its founding by Jonathon Barkl, Chelsea Border and Scott Fitsimones in 2017. The original instantiation of AirGarage, conceived when the three were students at Arizona State University, was to create a platform for people to rent out their driveways to college students who were paying exorbitant fees for on-campus parking. Barkl referred to this idea — a peer-to-peer marketplace for parking — as “AirGarage 1.0.”
“That was how we started getting in to the parking industry, in the parking problem,” he told TechCrunch in a recent interview. “The thread that carries through is we realized there’s underutilized space that is poorly managed and not really being monetized in the way that it should be, and we just have technology and add software to this, we can change that.”
In 2018, the company made its first shift, moving away from home driveways and toward parking space owners like churches and small businesses, to help them monetize their existing, underutilized asset. That was really when AirGarage hammered out its software-first full-stack approach, Barkl explained.
Two years later — in May 2020, when many cities were in the midst of their first round of stay-at-home orders and lockdowns — the company shifted yet again, this time to focus on parking real estate commonly found in downtown urban areas. The pandemic may seem like an odd time for a shift, especially for a startup that generates its revenue at least indirectly by people going outside, but Barkl described COVID as a “lightbulb moment” for AirGarage.
The way much of the parking industry works is by parking garage operators or managers leasing the space from the actual real estate owner. AirGarage started getting approached by owners who felt slighted by the managers during the pandemic, after these managers refused to continue paying them as part of prearranged lease agreements.
Plus, many of these agreements see the managers receiving 100% of the revenue after paying the lease fee; Barkl said they would talk to owners who were receiving $10,000 a month under a lease agreement for parking real estate that was generating $30,000 a month, leaving them with only a third of total revenue.
Instead, AirGarage offers a 70-30 split in the owner’s favor, with full transparency regarding how much money the parking real estate is pulling in each month. To increase revenue even more, AirGarage also collects data on the parking site in order to offer things like dynamic pricing, in addition to conducting all advertising, payment processing and online listings.
On the backend, the startup offers parking enforcement under a program it calls “space force.” It works by engaging gig workers — an Uber driver who is idling in-between rides, for example — to pull into lots and check license plates. Drivers get paid for each license they ensure is valid, and that fee is also dynamically priced according to how busy the lot is that day.
With the fresh round of funding, AirGarage is aiming to roll out new software and services so owners can generate revenue not only from personal vehicle parking, but from food trucks that need a place to park or cloud kitchens that need a place to store food. The engineering team is also working on features like using cameras to automatically read license plates so a driver can put her plate number on file with AirGarage and not have to worry about payment in the moment at all.
Barkl estimated that out of the 200-plus customers the company has signed on, fewer than five have cancelled services.
“In the last 20 years, while other industries have had monumental shifts because of technology and software, the parking industry is not quite there yet,” he said. “These companies are just so backwards and old-school in the way that they do things, and the only way to fix that, in our opinion, is to replace those companies entirely with what we’re building, which is that full-stack operator.”
Source: New feed