Car Next Door to raise $1.5 million through crowd funding
Car sharing platform Car Next Door, is raising $1.5 million through a crowd-sourced equity funding platform Equitise, a move its CEO says will drive more engagement of its members with the startup.
Founded in 2013, Car Next Door has 50,000 users and 1,300 cars listed on the platform. Members can rent a car from as little as $5 an hour to $25 a day.
The start-up operates in Sydney, Melbourne and Brisbane with plans to expand to the Gold Coast, Canberra, Perth and Adelaide in the next few months.
Its users and revenue have doubled each year since it launched. Turnover is expected to hit $1 million in January.
The move has been a long-term plan of co-founder and chief executive Will Davies.
"Since we started our users have been really keen and passionate about what we're doing and keen to invest and get involved," he was cited as saying The Australian Financial Review.
"It's a good way to get them more engaged and it will help with retention and word-of-mouth."
Car Next Door, which lets users find a car in their neighbourhood to hire from a minimum of $25 per day,
Car Next Door expects to raise a minimum of $500,000 from sophisticated investors using Equitise, as part of a $4-5 million Series B round, the AFR said.
It has already raised $2.3 million in its latest round from existing investors such as Caltex and Trevor Folsom's Investible.
If the crowdfunding move pays off, Davies expects to go in for another capital raising which would be open to the public once the legislation permitting private companies to partake in crowd-sourced equity funding passes the Senate.
On September 29, the federal government's legislation to enable crowd-sourced equity funding from retail investors for unlisted public companies came into effect, but an amendment to the laws that will open it up to private companies is still going through the Senate.
"The big thing for us will be retail investors. We want people to be able to invest a few thousand dollars," he said.