DropCar shares accelerate after surge in 2Q revenue thanks to new automotive partnerships

Shares in DropCar Inc (Nasdaq:DCAR), a provider of app-based mobility services and logistics software for cars, climbed Tuesday after the company reported a surge in second-quarter revenue thanks to money brought in from new automotive partnerships.

In response, investors sent DropCar shares up 10.2% to US$0.97 in the morning session.

Across the six months ended June 30, DropCar’s enterprise business-to-business segment’s revenue more than doubled from the year-ago period to US$485,000 from US$206,000, pushed up by the onboarding of new automotive partners, particularly in the car-sharing arena as well as organic growth from its existing customers.

Over the same six-month period, DropCar’s consumer segment saw an even bigger jump in revenue to US$3.08 million, up from US$1.32 million, in the comparable period last year.

Read: DropCar stock jumps on partnership with Volvo dealership

DropCar did note that its consumer group’s gross margins failed to see the same benefits of scale as its business-to-business segment.

“With more than 250,000 vehicle movements to date, and a list growing every day of [original equipment manufacturers], dealer, fleet companies and car-sharing companies interested in our technology and services, we have established our platform as an enabling technology for the future of urban mobility,” said DropCar CEO Spencer Richardson in a statement.

Starting in September, DropCar will be converting its existing STEVE service from an all-inclusive monthly parking and valet service bundle in which DropCar valets pick up and drop off customer vehicles to an owner self-park model that provides access to a la carte on-demand valet services.

DropCar is looking to leverage its strong relationships with parking providers to offer discounted parking in prime areas and then charge added pick up and drop-off fees when customers want the added convenience of front-door service.

Read: DropCar surges once again after tie-up with Jaguar Land Rover Manhattan dealership

On the list of other recent announcements is DropCar’s move to sell the assets of its low-voltage contracting unit for US$3.5mln in a non-dilutive all-cash transaction. This sale is set to close in the fourth quarter of this year.

Founded in New York City in 2015, DropCar offers valet parking and other services that reduce the cost and hassle of owning cars in cities. DropCar’s Enterprise Vehicle Assistance and Logistics (VAL) technology platform can be used to automate the pick-up and delivery of customer vehicles for service and maintenance.

DropCar has seen increasing demand for its technology in the New York City area, with various Lexus, Mercedes Benz and Toyota dealerships adopting its VAL platform.

Contact Ellen Kelleher at [email protected]

Story by ProactiveInvestors