A Phoenix-based RV rental startup has changed its course on plans for an initial public offering and is now looking to raise venture capital to grow the company.
RVnGO, which created an online platform for peer-to-peer RV rentals, had filed IPO paperwork with federal regulators in January 2023 to trade on the Nasdaq exchange under the ticker symbol “RVGO.” The company sought to raise more than $10 million from the IPO, the Business Journal previously reported.
The company amended its filing in April to offer 3.75 million Class A shares at a midpoint of $4.50 a share, which would have raised more than $16 million. On March 4, the U.S. Securities and Exchange Commission declared RVnGo’s application abandoned due to inactivity.
RVnGO encountered a “very challenging marketplace for small-cap IPOs” last year, prompting a decision to remain private and instead turn to the venture capital market for investments to support the company's next phase of growth, said Paul Kacir, founder and CEO of RVnGO.
“We thought we’d be better off raising capital ourselves, rather than raising it from the public market,” Kacir said.
RVnGO’s plans to raise capital in the private market illustrates a national slowdown in companies choosing to go public amid economic headwinds in 2023.
Just eight companies completed an IPO in the fourth quarter of 2023. Meanwhile, some 723 "unicorn" companies hold the vast majority of returns for the market and they have balked at listing in the current environment, according to Pitchbook.
RVnGO aims to raise up to $10 million in a series B round by this summer. Proceeds will go toward operating expenses and supporting the company in its path to profitability, Kacir said.
Company's platform is similar to Airbnb, but for RVs
Kacir, a former attorney and vice president and general counsel for First Solar, founded RVnGo in 2015. The company operates an online RV rental platform allowing hosts to rent their vehicles to guests — similar to Airbnb, but for RVs.
Kacir told the Business Journal in 2022 that RVnGO stands apart from competitors — such as Outdoorsy and RVShare — because its platform is free to use and does not charge any fees to hosts for rental transactions.
RVnGo, which was a consumer category winner at Arizona's Venture Madness in 2019, found success during the pandemic as travelers opted for road trips over air travel, boosting demand for RV rentals.
Despite RVnGo’s uptick in revenue and RV bookings, the company incurred a net loss of $7.7 million in the fiscal year ending Nov. 30, 2022. It also incurred a net loss of $3.4 million in the fiscal year ending Nov. 30, 2021, according to a filing with the U.S. Securities and Exchange Commission.
RVnGO generated $439,809 in revenue in 2022, a nearly 30% increase from $338,967 in the prior year. In the first quarter of 2023 — which is the most recent data publicly available — the company reported revenue of $53,849, marking an 80% increase over the first quarter of 2022.
“We generally had very positive gross margins last year,” Kacir said, adding the company’s revenue appears to be doubling annually.
While RV rental demand has leveled from its pandemic peak, RVnGO continues to see demand from travelers.
The company’s platform now has more than 31,000 registered users and recorded 30,000 nights of RV rentals, Kacir said.
The company may consider an IPO within a couple of years. For now, it will keep its eye on the market and focus on profitability, he said.
“I think the biggest milestone is we will become profitable and cash flow positive by this summer,” Kacir said. “It changes the landscape and we won’t be constrained by capital markets in our growth."
