CarExpert gears up as Seven West Media takes strategic stake

Seven West Media is making a major move into the booming market for automotive editorial content, taking a strategic stake in emerging start-up CarExpert.

CarExpert founders Anthony Crawford, Alborz Fallah and Paul Marci.

The Kerry Stokes-backed Seven West Media is making a major move into the booming market for automotive editorial content, taking a strategic stake in emerging start-up CarExpert in a capital raising that values the firm at $25m ahead of a planned listing on the Australian Securities Exchange.

CarExpert, the nation’s only privately owned major automotive publisher, was established by entrepreneurs Paul Maric, Alborz Fallah and Anthony Crawford two years ago after they sold their CarAdvice.com.au auto content business to Nine Entertainment for $62m in 2018.

Nine has since folded the CarAdvice asset into its Drive automotive classifieds business.

Mr Fallah said he, Mr Maric and Mr Crawford had intended to remain with Nine after the sale of their CarAdvice business.

“We loved what we did. But once the Nine full takeover took place we realised quickly that Nine lacked the understanding for digital publishing, especially automotive. We spoke the language of talking to mums and dads buying cars. We made it more human. Nine was way too corporate,’’ he said.

They left in September 2019, taking 12 CarAdvice staff, and quickly established their own business.

CarExpert uses a reverse subscription model where instead of charging readers for car reviews, it charges car manufacturers for each person who reads a review of their vehicles.

It uses no banner advertising, sponsored content or advertorial, instead offering car content from independent motoring experts to help car buyers make better buying decisions.

“In the future with the agency model of no dealerships, we want to be able to have our customers use an iPad in the experience centre to buy a car directly from a manufacturer“ Mr Fallah said.

“For us it is about becoming the go-to car content site in Australia. If you want to do your research on buying a car, you come to us.”

He said Range Rover was the first company to use the Car Expert digital publishing business and claims they “spent $10,000 and got $150,000 worth of value”.

CarExpert.com.au, whose parent company is Expert Media, had its highest monthly website traffic in October 2021 with over 1.4 million unique Australian visitors.

The channel now has almost 150,000 subscribers.

The business has just completed a $10m capital raising, including a $3m cornerstone investment from Seven West Media, and is setting its sights on an IPO over the next 12-18 months. It had previously raised $7m from wealthy investors.

Discussions with Seven commenced in June, and the partnership will see auto content published across Seven’s broadcast, digital and print platforms.

“One of the things we are excited about with Seven is that we are actually doing this properly, unlike with the Nine experience. We will help grow their revenue through content,” Mr Maric said.

Earlier this year CarExpert trialled its first experience centre at Warringah Mall on Sydney’s northern beaches, where it brought 40 cars to be viewed and test-driven by prospective buyers.

Some 32,000 people attended the site during the three-month trial before it was shut down by Sydney’s Covid lockdown.

“Everyone is sick of the dealership experience. But we aren’t selling them anything. To be able to sit in the car, drive it and get feedback without strings attached was a new experience for them,” Mr Fallah said.

Proceeds of the capital raising will now be used to resume the rollout of the Experience Centres in the first half of 2022, launching the first in Melbourne and then in other states outside NSW and Victoria.

“We want to increase revenue by 2.5 times over the next year and move into America before the IPO. I really hope to have something started in America by mid next year,” Mr Fallah said.

The business is currently achieving run rate revenue of $2.5m-$3m annually.

It comes as a global semiconductor shortage continues to squeeze the supply of microchips used to manufacture cars, which has led to production delays on new vehicles and shutdowns across the auto industry.

Some analysts tip a production shortfall of almost 8 million vehicles by the end of the year. “Our revenue would be 80-100 per cent higher if not for the new car shortage,” Mr Fallah said.