Major financiers take a share of Car Next Door

Melbourne-based car share start-up Car Next Door has closed a $5 million Series B capital raising.

Car Next Door CEO Will Davies, left, with Caltex Australia CEO Julian Segal in Sydney. Picture: James Croucher

Melbourne-based car share start-up Car Next Door has closed a $5 million Series B capital raise, a round led by Caltex and Trevor Folsom’s early-stage investment group Investible.

Chief executive Will Davies told The Australian the round was oversubscribed, with prominent supporters on board including venture capitalist Roger Allen, Macquarie Group, Hollard Insurance Company and Russian investment firm Larix VC.

Shark Tank “shark” and technology entrepreneur Steve Baxter also increased his stake in the business.

Mr Davies said the support for his peer-to-peer car sharing platform represented a wider understanding of the shift away from owning cars towards accessing them on demand.

He said the funds would be focused around platform development and ramping up marketing efforts which had been relatively quiet until now.

“We’ve got a platform that works very well, but we’ve got unlimited ideas and we want to focus on making it better and better,” he said. “We need to make the user experience better on both sides. We’ve done surveys of customers, so we know what we need to do to fix it and make it smoother.

“And we’ve been pretty careful with the marketing. Our view is you don’t want to market a platform until it has a certain level of establishment about it. We have a strong track record now, so we’ll be doubling down on marketing that we know works already, and testing out new things.”

In this round, Car Next Door also opened up the raise to sophisticated investors through crowdsourced equity funding platform Equitise.

“We wanted to provide the opportunity for smaller investors to get involved. We were aiming for a minimum of $500,000 and we ended with 60 per cent over that,” Mr Davies said.

“This was a test run; ultimately we want to extend this to all of our users. We’d love to see 1000 of our users investing in us as well as using the platform.”

Car Next Door now has 1300 cars and 60,000 borrowers, and saw a five-time growth trajectory across all key metrics since its last capital raise closed two years ago.

“This month we hit a record — 2000 bookings in one week. When we first started, in 2012, it took us a year to reach that number,” Mr Davies said.

“The focus of this year is on continued growth and improvement of our systems.”

Established in Sydney, Melbourne and Brisbane, Car Next Door rolled out on the Gold Coast in December. There are plans to move into Canberra, Adelaide and Perth in the next six months.

“I had a mortgage broking business, and I made a decision at 28 that humans are buggering up the environment and one of the worst ways we’re doing it is emitting way too much carbon,” Mr Davies said. “I wanted my primary goal to be reducing carbon emissions, so what’s getting me excited about this is as we’re growing, we’re having an impact on the amount of carbon we’re putting into the atmosphere.”