Local Motion Raises $6 Million From Andreessen Horowitz
BY Eric Markowitz
The founders of the keyless entry device start-up knew they wanted to pitch Andreessen Horowitz. Here's why it was a smart move.
A small, scrappy company in Burlingame, California, is quietly rethinking the way the car sharing industry will function in the years to come--and it just got a big boost from one of Silicon Valley's premier VC firms.
Local Motion, the three-year-old start-up, announced Wednesday that Andreessen Horowitz has invested a Series A round of $6 million in the company. Steven Sinofksy, the former Microsoft executive who recently joined the VC firm as an Andreessen partner, will join Local Motion's board.
Local Motion has spent the last few years (initially out of Lemnos Labs, the hardware incubator) developing a small module--a box--that essentially eliminates the need for keys in fleets of cars. The way it works is fairly simple. Let's say a company owns 25 cars for their employees to use. Local Motion installs its device into each car, and links each module to the car's various diagnostic systems. Employees can then use the Local Motion app to find the company car using its GPS system, unlock the doors, start the car, and drive off.
The company has attracted a small, but growing user base. Google, for instance, uses Local Motion to manage its fleet. In addition to keyless entry, the module also mines the car's data, looking at things like speed patterns, energy consumption, and other information that would help the fleet managers better train their drivers, and understand how to optimize the system. Local Motion charges companies per unit, as well as a recurring, monthly fee. The company does not disclose revenue.
In an interview, co-founder Clement Gires says the company will use the investment to scale the team. Right now the company has eight employees but by the end of the year, Gires wants to expand to 25. The recent surge of companies focusing on car sharing--from Zipcar to Getaround--will fuel Local Motion's growth.
"We see them as potential clients," he says.
The VCs of the Sharing Economy
Looking at Andreessen's portfolio, it's not exactly a surprise that the firm would be interested in a company like Local Motion, which is essentially a service provider to the companies in the sharing economy. Andreessen has become the de facto VC for this growing industry. The firm led Airbnb's $112 million Series B in 2011, and more recently in May, the VC firm plowed $60 million into Lyft, the on-demand ridesharing app. Local Motion's keyless technology is relevant to both companies--not to mention any start-up in the sharing space--so it could shape up to be a very strategic investment.
And that's exactly what Local Motion had in mind.
Asked if Andreessen's portfolio made a difference when deciding who to raise capital from, Gires replied, "Absolutely."