Steve Case, AOL co-founder, grosses $96 million on Zipcar
BY JEFF GREEN Bloomberg News
Thursday, January 03, 2013
1/03/13 at 3:43 AM
Steve Case and his Revolution LLC fund for startups will gross about $96 million in the sale of car-sharing service Zipcar Inc. to Avis Budget Group Inc., a deal that validated his early backing in the industry.
Case, who co-founded America Online Inc. in 1985, invested in car-sharing in the mid-2000s, when the business model was still untested. By last August, his fund was the largest shareholder in Cambridge, Mass.-based Zipcar, which rents cars by the hour or the day in cities and on college campuses.
Case, who chairs efforts on entrepreneurship for President Barack Obama's Council on Jobs and Competitiveness, did not respond to requests for comment Wednesday.
The success with Zipcar reinforces Revolution's stated goal of investing in startups designed to disrupt established business.
Case's Revolution Living LLC had a 16 percent stake as of Aug. 28, according to data compiled by Bloomberg. Case, a board member, also personally owns 1 million shares, the data show.
After leading AOL's acquisition of Time Warner Inc. for $124 billion in 2001, Case stepped down as chairman of the combined company in 2003. The board voted to drop AOL from the company's name in September that year, reflecting investors' disappointment in the slumping shares.
Case, 54, formed Revolution in 2005 as a $500 million fund to invest in health care, wellness and other companies.
Flexcar, a car-sharing startup, was one of his first forays in August 2005. Case said at the time he got interested in Flexcar while walking past one of its parking spots near Revolution's offices in Washington, D.C. He used the service several times to reach meetings around the city. Zipcar bought Flexcar in 2007.
Revolution has investments in about 30 companies. They include daily deal website LivingSocial Inc.; exercise tracking venture RunKeeper; HelloWallet, an online service helping employees manage their expenses; and SparkPeople, a website helping people reach their fitness goals.
Last year, Revolution cleared about $100 million in the sale of Medicare exchange company Extend Health Inc. to Towers Watson & Co. In the largest exit from the fund, American Express Co. bought money-card company Revolution Money in 2010 for about $300 million. The fund owned just under 50 percent of Revolution Money, according to the person.
Original Print Headline: Steve Case grosses $96 million on Zipcar
A Mini Cooper owned by Zipcar Inc. sits in a Zipcar parking space in Washington, D.C., on Wednesday. Avis Budget Group Inc. has agreed to buy short-term rental pioneer Zipcar for $491 million, signaling a shift in the industry to embracing drivers who don’t want to own cars. ANDREW HARRER / Bloomberg