Radnor firm backs Chicago parking app
September 12, 2018
This article was first published by The Inquirer.
NewSpring Capital, the Radnor firm that invests money for clients including the Pennsylvania state pension fund (SERS), last Fridaysaid it had led a $20 million capital infusion into Chicago-based ParkWhiz Inc., maker of a parking reservations and payments system designed to find parking spaces and let you choose, based on location and price.
Parking apps are highly competitive — and a software-development specialty in Chicago, where ParkWhiz and at least two well-funded competitors are based. ParkWhiz claims more than a million users, through multiple partners and brand names.
Like its rivals, it is scrambling to sign up curbside and garage real estate in hopes of collecting fees from drivers willing to pay extra bucks for speedy parking arrangements so you can avoid circling the upper decks of a big-city parking garage in frustration.
ParkWhiz raised an earlier $37 million, since 2014. Earlier investors, including Baird Capital, Jump Capital, and Beringea, joined NewSpring in this Round D (fourth-time) funding.
“Our biggest competition is SpotHero. SpotHero and ParkWhiz are one and two — that close — but they’re very different business models,” NewSpring partner Glenn Rieger, a Park-Whiz board member told me.
SpotHero signed up a lot of city parking systems. ParqEx, another Chicagobased parking app, targets private garages.
ParkWhiz has signed up some of both, but “it has really been making a lot of hay with partnerships,” says Rieger. “Like Ticketmaster Live Nation. If you go there today and buy a ticket to a Bruce Springsteen concert, what it does is ask,‘Do you want parking at the venue?’ And it’s all wrapped up in the same ticket price.”
The app is supposed to run smooth and quiet, like a good ride. “Remember Intel Inside? This is like ‘ParkWhiz Inside’. It’s completely whitelabeled — it looks like another function. But you’re actually buying your parking through ParkWhiz,” said Rieger. “They’re doing a fabulous job of developing relationships with partners. In addition to Ticketmaster Live Nation, they are with Groupon; Madison Square Garden; Little Caesars Arena,” in Detroit, he said.
“And they have 70 locations in Philadelphia,” so far. They’ve got the Pennsylvania Convention Center. They’ve made arrangements with national garage operators such as InterPark and Park America. ParkWhiz is also available in new Fords (and Ford’s Jaguars and Land Rovers) and Hyundai (part of the Korean carmaker’s Blue Link “infotainment” package), Rieger says.
Like Uber and Lyft, Park- Whiz practices “dynamic pricing,” which means the space costs more when a lot of people need one — for example, at big events — and less when there’s little competition.
Some civilians still think of that kind of arrangement as price-gouging, exploiting a temporary need to the consumer’s disadvantage.
Industry advocates like Rieger call it “frictionless parking,” minimum hassle, when you want to choose how close you may roll up to your event, and to know the price differentials between a little closer and a little farther out.
NewSpring has raised more than $1 billion to back mostly tech companies since 2000. The company doesn’t publish its returns. SERS in its most recent annual report says it invested $9.85 million in NewSpring Growth Capital II in 2006 before the recession, and collected $13.8 million back, so far. SERS invested $21.7 million in NewSpring Growth Capital III in 2012, and has so far gotten $2.2 million of that back.