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.
