Shares of HyreCar (NASDAQ:HYRE) stock are up by over 50% today after the company announced that it has received a $100 million revolving line of credit (RLOC) from Medalist Partners and an undisclosed “premier global investment bank.” The bank will “provide primary financing” while Medalist provides $20 million of capital. HyreCar operates as a car-sharing services company that matches rental car providers with drivers.
AmeriDrive is HyreCar’s fleet operator partner and provides vehicles exclusively listed on HyreCar’s platform. These vehicles are often used for ride-sharing or for deliveries, such as through Uber’s (NYSE:UBER) Uber Eats. With proceeds from the new deal, HyreCar expects AmeriDrive to purchase an additional 6,000 to 7,000 vehicles over the next year to year and a half. These vehicles will serve as collateral for the RLOC.
HyreCar CEO Joe Furnari added the following about the funding news:
“We continue to expect to be profitable at the 6,500 to 7,000 daily car rental threshold, and we believe this deal will allow us to exceed that number. As a reminder, every 10,000 active rented cars on the HyreCar platform represents approximately $100 million in run rate revenue.”
HYRE Stock: HyreCar Receives $100 Million in Financing
Meanwhile, Medalist executive John Slonieski sees the alternative transportation and electric vehicle (EV) space as a “multibillion-dollar opportunity.” According to Slonieski, Medalist believes HyreCar is “uniquely positioned” to take advantage of these industries.
Currently, HyreCar is focused on expanding its geographic presence into new markets. The company seeks to do so by operating an asset-light business through AmeriDrive. The collaboration between the two companies gives HyreCar access to vehicles not included on its balance sheet.
During the second quarter, HyreCar reported revenue of $10.5 million, a record high up 16% year-over-year (YOY). New driver sign ups increased by 10% sequentially in Q2, while first driver rentals increased by 28%. However, the company also posted a $4.4 million net loss and an earnings per share (EPS) loss of 20 cents. A year ago, the net loss came to $9.3 million. As of June 30, HyreCar had only $6.7 million in cash and cash equivalents, so the $100 million in financing shouldn’t come as a huge surprise.
Furnari and CFO Serge De Bock will host a conference call at 4:30 pm Eastern on Sept. 7 to discuss the new financing. Participants will be able to ask questions afterwards.
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On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.