Update 5/27 11:45 a.m.: Zagster confirmed that the insider round is worth $1.2 million. Bill Ford invested in Zagster through strategic investment firm Fontinalis Partners, which he cofounded.
Boston’s privatized bike-sharing company Zagster has closed on an undisclosed round of funding from existing investors, along with newcomer equity crowdfunding firm Launch Angels.
Since its start in 2007, the Techstars grad has raised around $2.5 million in funding from LaunchCapital and a number of prominent angels, including Bill Ford, Joe Caruso, Walt Doyle, Bob Mason, Jay Batson and Jean Hammond.
Zagster partners with colleges, hotels and businesses to provide students, visitors and employees access to bikes. The team, which includes veterans from Zipcar and Brightcove, was kindling the idea before the aforementioned public bike shares ever existed, the company’s CEO and Co-founder Tim Ericson told BostInno.
“Campuses and businesses were being left in the dark, but there was an actual need there,” Ericson explained.
Zagster’s traction serves to prove his point.
The startup now offers bikes in 16 states, from Maine to Michigan, and has inked deals with Yale, Duke, Four Seasons Hotels, Hyatt Hotels, QuickenLoans and other enterprises in Detroit. What’s more, Ericson claims that Zagster “can roll out anywhere in the U.S. in less than two weeks – even Alaska and Hawaii,” thanks to a major partnership with Fuji Bikes (the bike manufacturer allows Zagster to keep a mini-warehouse inside its own warehouse, based in Philadelphia).
In comparison, competitors take around six to nine months minimum to dispatch bikes to a new location, according to Ericson.
That light, flexible model is what appealed most to Launch Angels’ CEO and founder Shereen Shermak. “We thought the operational model really showed learning about what the Hubways and Citibikes were doing,” Shermak told BostInno of the investment, which stands as the firm’s second investment to be announced.
Zagster, which is now seeing recurring revenues, plans to put the funding toward expanding its existing programs and continuing to spread its bike-sharing service in the South and around the country.
The company is currently based in Cambridge.
Image via Zagster
