Brisbane car subscription start-up Karmo buys Motopool to be Australia’s biggest short-term vehicle lender

A used-car salesman from Brisbane now runs Australia’s largest car subscription player Karmo, with its business bolstered by the acquisition of rival Motopool.

Chief product officer Sam Zammit, chief financial officer John Bush, CEO and founder Nick Boucher, chief revenue officer Laura Harewood and former Motopool CEO nor Karmo chief operating officer Andrew Rickett.

A car salesman from Brisbane who clued on to the fact that the lifespan for car ownership was getting shorter, has acquired a rival to become the largest subscription car player in Australia.

Nick Boucher’s Karmo has taken out a $138m loan from Toyota and VW’s venture arms to acquire Motopool, making his short-term car lender now the nation’s largest, with plans to acquire 5000 new vehicles.

The acquisition brings a combined annual revenue of $33m, and Karmo will have the most short-term rental vehicles in the country, on subscriptions costing $180 to $700 a week for cars valued between $20,000 and $160,000.

Mr Boucher’s secret sauce comes from his 18-year career as a salesman, starting as a trainee and rising through the ranks to general manager. He has established partnerships with 135 dealers across the country who count on his vehicles – which are on average recycled every six months – to flow through their sales yards after subscriptions end.

“When I was a dealer, we struggled with getting a steady supply of quality, near new vehicles,” Mr Boucher said. “The amount of customers that come in asking for not necessarily a new car but a demo vehicle or a near new vehicle (rises) when economies are tight.”

Near new offerings have become even more attractive after Covid chip shortages drove up the price of second-hand cars and made new ones harder to get.

For Karmo, that meant it was able to continuously offer new vehicles, with 85 per cent of its fleet brand new.

The idea came about several years ago when Mr Boucher was at a barbecue.

“You know when you hang around with friends at barbecues and things like that and people constantly see the brand new demo cars that I was driving, they would ask, ‘how do I have one of those?’” he said.

“Over that nearly 20 years, you could actually see your ownership was getting a lot shorter as well.”

Mr Boucher took a chance on a subscription business lending vehicles to Uber drivers and delivery people in 2019 and during the pandemic he branched out into consumer lending.

It’s a gamble that has paid off, with Karmo’s consumer lending side responsible for 74 per cent of its revenue prior to the acquisition. The lending for Uber drivers, which is featured by Uber on its marketplace for drivers, makes up the remainder, which is understood to make a total of $15m for Karmo.

Deloitte research shows that nearly one fifth of people now prefer car subscription services to owning a vehicle outright. And that figure jumps up to more than quarter – 28 per cent – for those aged between 18 and 34.

Karmo’s acquisition of Motopool arrives just two months after Uber announced it was getting into bed with global carshare platform Turo.

Uber had previously attempted to play in the market with its acquisition of Australian carshare start-up Car Next Door in 2022, but it shuttered the business in August this year before then announcing a global partnership with Turo, allowing its customers to rent vehicles from Turo via the Uber app, in a similar fashion to its partnership with Lime electric bikes.

Karmo and Motopool operate on far longer terms, with Karmo offering four-month, six-month and nine-month subscriptions.