Car Next Door
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Car Next Door Online peer-to-peer car-sharing marketplace operating in four cities, with 50,000 members sharing 1,200+ vehicles.
  • Environment and Clean Tech
  • Internet Business
  • Leisure and Tourism
  • A$34,896

    invested

  • 7% funded

  • 25 days & 12 hours

    time left

  • 1.8% - 5.2%

    min - max equity offered

  • A$499,972.00 - A$1,500,005.00

    min - max investment sought

  • A$4,362.00

    min investment parcel

INVEST IN THIS OFFER

More detailed information about this offer is contained in this Information Memorandum

Information Memorandum
Offer overview

Tranche 1 (Caltex & Investible)

Car Next Door is conducting a Series B Capital raise of up to $5m at a pre-money valuation of $24.99M which equates to $87.24 a share.  Tranch 1 has already closed with A$2,246,343 raised and 25, 794 shares issued. This occurred outside of the Equitise platform and was led by Caltex and Investible (two existing investors of the business).

 

Tranche 2 (Equitise round)

Equitise is facilitating a portion of the remaining shares in this offer, raising up to $1,500,005 (17,194 preference shares) – as part of tranche 2.  Because tranch 1 has closed and the shares have been issued, the new pre-money valuation is A$24,999,319.92 + A$2,246,343 = $27,245,662.68, and the price per share remains at $87.24.

 

 

Who can invest in this offer?

The offer of Car Next Door Pty Ltd. in Australia is restricted to “Sophisticated and Wholesale investors”. A Sophisticated investor has net assets of at least A$2.5 million or has a gross income for each of the last two (2) financial years of at least A$250,000 a year OR a Wholesale investor is one who meets the ASIC Wholesale classification.

The offer of Car Next Door Pty Ltd. in New Zealand is restricted to “Wholesale Investors” (including eligible investors) as defined in clause 3 of Schedule 1 of the Financial Markets Conduct Act 2013, or persons who are otherwise entitled to receive private offers of financial products without first receiving a product disclosure statement or any equivalent document (together, Qualifying Investors).

Applications or requests for information from persons who are not Qualifying Investors cannot be accepted and we reserve the right to accept or reject any or all applications at any time. We may also require further information, documentation and/or certification from an applicant to confirm their investor eligibility.

For more information contact Chris Gilbert on +61 447 863 000 or chrisg@equitise.com.

Executive summary

 

Car Next door is a fast-growing, highly scalable personal transport marketplace.

From a pilot operating in a few Sydney suburbs in 2013, Car Next Door has grown to a powerful peer-to-peer car-sharing marketplace operating in four cities, with 50,000 approved members sharing 1,200+ vehicles.

 

 

We have strong momentum and solid unit economics. Our early investment in our software platform and operational systems has given us the foundation for fast, sustainable growth. Key metrics such as approved members and vehicle listings, monthly bookings and revenue are growing at increasingly faster rates as we scale up: 

 

We have developed the world’s best systems for peer-to-peer car sharing

Car Next Door has developed a unique, patent-pending method to solve the core problem of peer-to-peer car sharing: allowing secure, unattended access to cars. Our combination of an electronic lockbox with a plug-in GPS tracker and online booking and payment platform lets us onboard a wide range of vehicles at low cost and scale rapidly. Our instant booking technology means that car owners are not required to approve each booking request. This leads to high booking numbers and revenue per vehicle.

… and we’re only just getting started.

With a strong in-house development team and solid systems and processes, we are well placed to increase our world-leading position. Our unit economics are very strong. We know that every $1 spent on acquiring users will return $3.5-$5 in Contribution Margin over that user’s lifetime.

With this raise we will step up the pace of growth by scaling our marketing efforts substantially, using channels that bring proven returns.

In Australia alone, there is enormous scope for growth: we are on track to have an enterprise value of $200 million by 2022 based on a 10 x EBITDA valuation.

Key statistics

 

Car Next Door has rapidly grown from a few cars shared in a pilot scheme in early 2013 to become the dominant peer-to-peer car share marketplace. As we’ve grown our peer-to-peer business we have also become the second-largest of five car share businesses in Australia (after GoGet).

As at October 2017:

  •  We had 1,258 cars and 49,000 Borrowers listed on the platform across Sydney, Melbourne, Brisbane and Newcastle 
  • Our average monthly marketplace turnover is $580,000 and our monthly share of revenue is $230,000 - both have grown 5 X since our last capital raise in September 2015

 

  • 75% of our trips are repeat trips
  • Our Car Owners’ income is increasing monthly, with the average established Car Owner $3,500 better off each year through sharing their car

Business model

 

How we make money

We charge:

  • A percentage of the time-based and distance-based fees for each rental. We keep 50% of time-based income up to the first $240/month and 25% of time-based income after that. In addition, we keep 8 cents out of the 33 cents that Borrowers pay per kilometre.
  • Monthly recurring membership fees and/or booking fees to borrowers
  • Optional excess reduction fees to Borrowers

In order to drive rapid Car Borrower adoption we have a “Featherweight Plan” with free sign up and no monthly fees.

However, this plan has an excess of $2,000 if the Borrower causes damage and attracts a $5 booking fee each time they borrow.

Once a borrower starts borrowing frequently, it becomes beneficial to them to upgrade their plan to our “Heavyweight Plan” with a $19 monthly fee, no booking fees, and a low $500 excess.

Approximately 9% of our gross margin comes from recurring membership fee income (i.e the monthly plan fees paid by borrowers.)

Milestones & History

 

Market Overview

 

The Australian market

14 to 17 per cent of an average household budget in Australia’s major capital cities is spent on transport - compared with electricity, water, and telecommunications costs, which account for only one to three per cent of income combined.

In 2016, the Australian Automobile Association reported that a typical Sydney household faced weekly transport costs of $419 per week, with Brisbane households spending $376 a week and Melbourne $348 a week. This equates to an annual spend of $61.5 billion.

Facing these high costs, Australians are increasingly turning to services that let them access car transport on demand: both through rideshare (e.g. Uber, GoCatch) and flexible drive-yourself options (e.g. Car Next Door, GoGet.).

Peer-to-peer car sharing gives the 10 million Australians of driving age the option to access cars instead of owning them, and so will attract an ever-increasing portion of this spend.

Competitive Landscape

Use of funds

 

The funds raised in this round will be used to drive the rapid expansion of our proven platform.

We will use the investment for:

  1. $3.5M - Customer acquisition . Our unit economics are now better understood and we have a high degree of confidence that every $1 spent on acquiring users will return $3.50-$5 in Gross Contribution Margin over that user’s lifetime. It therefore makes sense to scale our marketing efforts substantially by investing more in the channels that bring proven returns.
  1. $1M - Platform enhancement. We have dedicated, and continue to dedicate, substantial development resources to improving the platform to create a great experience for Owners and Borrowers. By making it as easy and intuitive as possible to use Car Next Door, we see more first-time and repeat usage and more referrals to grow the membership community. This money will be spent on development items beyond general platform maintenance.
  1. $240k - Conversion Optimisation. Focus resources on increasing conversion at each step throughout the conversion funnel from awareness of Car Next Door through to booking a trip or listing a car, as well as re-engaging and increasing repeat usage and lifetime value of existing customers. We will invest more resources for our Growth Team’s work of running many and frequent tests, analysing results and iterating in order to find and act on the most promising growth strategies.
  1. $240k - Securing dedicated on-street parking spaces in high-demand areas. Negotiate parking spots with councils in high-demand areas for Car Next Door leased cars where we have high confidence of positive return (i.e. inner city ring of Sydney and Melbourne). We are forecasting to have 250-300 leased cars in council parking spaces by January 2020, at a setup cost of approximately $2,000 per space and an ongoing annual cost of around $300 per space.
  1. $20K - Create corporate offering . Create and market an offering that will attract corporate accounts to the platform. We have been approached by multiple companies wanting to set up a corporate account for their team, but supporting this will require some modifications to our platform. This will substantially increase our Monday - Friday usage, which is the time when our fleet currently has spare capacity.
How my shares will be held

Your shares will be held on trust by a nominee company. This allows the company and the nominee directors to help manage communications between investors and Car Next Door. Car Next Door will only have one name on its share register.

Should there be a shareholder vote, such as on the future sale of the company, change in constitution or other shareholder resolution, the nominee will pass any required resolution to you, the investor to vote on. The nominee will then collate these votes and pass them up to Car Next Door. Where the corporate action (for example a shareholder resolution) requires the nominee to vote shares held as a single block, the nominee may vote the shares in accordance with a majority view expressed by those investors giving timely instructions.

Upon any liquidity event, where your shares are sold as a result of a trade sale or IPO, any funds available to you as a shareholder will flow through the nominee’s trust account to you, the investor. In the event of an IPO, where your shares are not sold but become traded on a public stock exchange, you will hold your shares directly in the company rather than through the nominee company. That is, the nominee will not stand in your way from recognising the economic benefit of a liquidity event.

There will be no associated fees (or 'Carry') to use the Equitise nominee service for this offer. 

We are happy to answer any questions about the nominee via email to contact@equitise.com.

Financial summary

 

Profit and Loss

Balance Sheet 

Note: If you would like a more detailed breakdown of Car Next Door's financial statements please email will@carnextdoor.com.au to have this facilitated.

Will Davies

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David Trumbull

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Car Next Door Information Memorandum

This is a redacted Information Memorandum for the Equitise platform. If further information is needed please request the complete version (an NDA may need to be submitted).

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Summary of Top Car Next Door Points

This document is a list of factors that position Car Next Door as an attractive investment opportunity.

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Investor Questions to Car Next Door

These are questions answered to prospective investors as part of this round of funding.

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The investors below have committed capital to the business in this funding round.

David Insull

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David Olofinsky

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Daniel Savage

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Nick MacPherson

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Brendan Lee

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Philip Robinson

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