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Kyte Systems Inc. co-founder and co-CEO Ludwig Schoenack said the car rental and delivery company hopes to continue with Goldman Sachs Group Inc. on a potential initial public offering after lining up financing from the marquee investment bank.
“[Goldman is] a team that we wanted to work with now and in the long run as we undergo various financing and take Kyte public,” Schoenack said in an email to MarketWatch.
He did not provide a timeline for a potential IPO.
Kyte, which provides car rental with delivery service in 14 U.S. cities, on Thursday announced up to $200 million in asset-backed credit financing with Goldman Sachs
GS,
and Ares Global Management Corp.’s
ARES,
alternative credit team under Felix Zhang, managing director.
The company currently has 100 employees and plans to continue hiring, Schoenack said.
Goldman was already on Kyte’s list as it searched for a debt financing partner that checked off three key boxes: an aligned vision for the future of the space and the flexibility to work with a rapidly growing yet small company; the ability to scale to a “multi-billion dollar financing” over the next few years, including syndication and asset-backed securities; and a team that the company wanted to work with, Schoenack said.
Some of the top lenders in the business then submitted proposals and Kyte chose Goldman, he said.
Although the company operates in a space with larger incumbents such as Hertz Global Holdings
HTZ,
Avis Budget Group Inc.
CAR,
Zipcar Inc. and others, Kyte still has an advantage, he said.
While the incumbents have mastered the operations part of the business, they have been slower to adapt new technology, he said. At the same time, technology-focused companies in the space may be adept at building software but they lack skill in the operations side of the business.
By contrast, Kyte has been built from the ground up to be skillful in both major buckets, similar to Amazon.com
AMZN,
Schoenack said.
“At Kyte, we heavily lean into both technology and operations,” he said. “We hire experienced operators and hire engineering talent from some of the most complex businesses ever built as we at Kyte…embrace that complexity as a moat.”
Founded in 2019 by Schoenack, Nikolaus Volk and Francesco Wiedemann, Kyte operates out of San Francisco with offices in Munich, Germany, with satellites elsewhere.
Kyte in October said it raised $30 million in Series A financing led by Park West Asset Management and Sterling Road, with participation from DN Capital, Amplo, 1984 Ventures, FundersClub, Moving Capital, Rosecliff Ventures, Seraph Group, Unpopular Ventures, Urban Innovation Fund, and the founders of Germany’s FlixBus.
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