Mobile Tyre Shop seeks to raise $6m as demand for EVs revs up

Growing demand for electric vehicles, which wear out tyres more than internal combustion engine cars, is set to bode well for Mobile Tyre Shop as it targets a $6m pre-IPO raise.

Travis Osborne is seeking to disrupt a $5.6bn market. Picture: Ian Currie

Mobile Tyre Shop has launched a pre-IPO raise of $6m to more than double the number of vans in its fleet, as it forecasts revenue to surge 54.7 per cent this year.

The company, founded by Travis Osborne in 2012 and backed by Melbourne investment banker and corporate adviser David Williams, is seeking to raise another $4m on listing, targeting a valuation of $40m.

MTS has a fleet of 43 vans and will use the raise’s proceeds to lift that number to 100 to disrupt a market worth about $5.6bn.

Consumer demand for mobile tyre fitting has increased from 13 per cent of the market pre-pandemic to 37 per cent, according to an investor presentation seen by The Australian. MTS is also seizing to capitalise on growing demand for electric vehicles, which represent 9.2 per cent of all new car sales in Australia, increasing 121 per cent year-on-year.

David Williams says online tyre sales represent about 5 per cent of Australia’s overall market.

The presentation said EV tyres were about 60 per cent higher than the average tyre price, with consumption 18 per cent higher.

Mr Williams says Australia has closely followed Europe and the US, where online tyre sales are growing significantly and stores are closing just as rapidly.

In Europe, there are several businesses capitalising on the move to online and fitting at home, including the listed German online tyre disrupter Delticom which had sales of €509m ($845.8m) euros in 2022. Meanwhile, Halfords in the UK has grown its mobile service vans from three to 748 in the past five years.

“Tyre stores are closing their doors because people prefer the convenience of having their tyres changed at home or work,” Mr Williams said.

“There is nothing not to like about buying tyres at a lower cost than a tyre shop and having them change in under an hour, while you go about your business at home or the office.”

A van costs $90,000, with annual running costs of $111,875. On average, revenue per van is $505,948 a year and completes 3.6 jobs a day. Higher performing drivers can complete 5.48 jobs a day, generating $774,692 revenue and $287,179 gross profit.

Last financial year, Mobille Tyre Shop’s overall revenue jumped 26 per cent to $17.92m, while it cut its loss from $3.8m to $2.6m. It is forecast to generate $625,000 earnings before interest, tax, depreciation and amortisation in the 2026 financial year, with the figure growing to $18.35m by the end of the decade. Revenue is expected to hit more than $200m a year by 2029.

Bell Potter is the sole lead manager for the raise.

Mr Williams says so far MTS has attracted interest from major European, Japanese, and Chinese brands.

MTS has grown to cover all major capital cities since appearing on Shark Tank in 2015.

In Australia, online tyre sales represent 5 per cent of the overall market, lagging the UK (21 per cent) and US (18 per cent).

The local market is also ripe for disruption, Mr Williams said, being fragmented with the top four retailers holding just under 28 per cent share.

MTS promotes itself as the leader in the online mobile tyre market, with 65 per cent of its sales online, and it offers extensive fleet services; supplying tyres and managing roadworthiness and compliance for many of Australia’s leading fleets and hire car companies.

Its investors have included Toga Group, the Rhonda Wyllie-backed Viburnum Funds group and Perth-based fund manager Merchant Group.

Mr Williams said previously that a new investor is likely to come from Pirelli, Goodyear, Bridgestone, Michelin, Toyo, Shandong Linglong Tire Co or one of the automobile clubs like NRMA.