AI for Car Rentals?! Prove It! | Pitch.Tech EP 2

Key Concepts:

• AI Dynamic Pricing Engine
• Fleet Management
• Mobility as a Service (MaaS)
• Car Rental Industry
• Dynamic Pricing
• Machine Learning (ML) Models
• Data Points
• Resellers
• Franchise Management
• AB Testing
• Key Performance Indicators (KPIs)
• Customer Segmentation
• Revenue Management

Rexalto Pitch Summary

1. Introduction:

• Laurana, co-founder and CEO of Rexalto, presents their AI dynamic pricing engine.
• Rexalto aims to optimize pricing for car rental and mobility companies.
• They are raising a pre-seed round of $1.5 million, having already closed $950,000.

2. Problem Statement:

• Car rental industry faces challenges: increasing vehicle prices, uncertain residual values, and the rise of electric vehicles.
• Mobility companies need to increase utilization and improve fleet distribution.
• Correct pricing is crucial for profitability and efficiency.

3. Rexalto's Solution: AI Dynamic Pricing Engine:

• Engine sets the right price at any given time by balancing supply and demand.
• Considers historical data, market data, competitor prices, weather forecasts, flight information, and booking information.
• Uses up to 500 data points for mobility companies and 20-40 for car rental companies.
• Pushes optimized prices back into fleet management systems or OTAs (Online Travel Agencies).

4. Target Market:

• Small car rental companies (50-100 cars) lacking proprietary software.
• Large companies managing franchises (hundreds of thousands of cars).
• Mobility companies.
• Focus on North America, Europe, and the Middle East.

5. Technology and AI:

• The AI aspect lies in the ML models that learn from past performance in specific locations and for specific customers.
• The system improves predictions and assumptions over time.
• The AI helps to avoid human error in pricing, which is a significant KPI for customers.

6. Traction and Revenue:

• 20 paying customers and piloting customers.
• Integrated with six reseller solutions.
• Generated approximately $200,000 in annual revenue.

7. Pricing Model:

• Standard pricing per car per month.
• Previously experimented with a model based on a percentage of revenue uplift but found it difficult to measure accurately due to external factors (e.g., holidays).

8. Competitive Advantage:

• Number of data points used in the engine.
• AI-driven learning and improvement.
• Focus on both car rental and mobility industries.

9. AB Testing and Results:

• Conduct AB testing in different locations to avoid customer bias.
• Worst result: +5% revenue increase.
• Best result: 6x increase (specific case: luxury car rental in Dubai).

10. Addressing Customer Concerns about Dynamic Pricing:

• Rexalto's system aims to avoid human error in pricing.
• Automates the pricing process and pushes it back into the system.
• Does not change prices based on individual customers but may cluster customers for mobility companies.

11. Team and Background:

• Laurana and her co-founders previously built one of the largest European car-sharing companies, generating $75 million in annual revenue and being cash flow positive.
• They decided to leverage their expertise in pricing and fleet management to create Rexalto.
• Laurana has a background in international business and experience in building and running a successful company.

12. Investor Feedback:

• The pitch should include a slide early on showing current customers, near-term customer pipeline, and long-term customer goals.
• The website copy needs improvement to clearly communicate what Rexalto does.
• The team's connection to the problem and their unique suitability to solve it should be highlighted.

13. Use of AI as a Buzzword:

• The investor notes that many pitches mention AI, but it is often used as a buzzword without explaining why it is important or how it is used.

14. Conclusion:

• Rexalto offers an AI-powered dynamic pricing engine for car rental and mobility companies.
• The engine optimizes pricing by considering various data points and learning from past performance.
• Rexalto has traction with 20 customers and is raising a $1.5 million pre-seed round.
• The company aims to address the challenges faced by the car rental and mobility industries by providing a data-driven pricing solution.