Peer-to-peer sharing services and collaborative consumption plays have been rising in popularity across Australia over the last couple of years. Platforms that share space for storage, household items, accommodation, parking spots and one of the most prominent – vehicles have been making an impact across the nation. They are giving owners the opportunity to make a passive income and help connect those in need of cheap and efficient alternatives to mainstream services.
One of these services that has been operating since 2012 is Car Next Door who recently completed the NRMA Jumpstart program administered by Slingshot as one of the scale-up companies.
Car Next Door, founded by Will Davis is a peer-to-peer car sharing platform. It is based on the premise that there are millions of people that have cars they hardly use and there is equal the amount of people that don’t really want to own a car, but occasionally would like to use one.
“Our platform lets the whole thing happen completely frictionlessly” says Davis. “We do that via an online platform where the borrower joins, they go online, search for cars, find a car that they like, book it and they can walk straight to the car. Each car has a lock box attached to the car or near the car and then we give them a one time code to get into the lock box. They get the key out, they drive, drop it back and then we charge the borrower and they pay the owner. We’ve got a GPS tracker that knows where the car is so you can find it at the start and also how far it’s gone.”
Given that the startup is actually an NRMA customer, all the cars available on the platform are covered by NRMA Roadside Assistance – being part of the Jumpstart program was a great strategic move by the company and allows them to leverage the corporates database of over two million car owners.
“That is the big thing for us, hopefully if there’s a good win-win, we will get some access to the vast numbers of car owners that NRMA have in their database. We will be able to offer them a way to make some extra money from their car when they’re not using it, which is a win for everyone” says Davis. “The other thing is, the NRMA owns ‘Thrifty’ and our platform is a great way if one of their rental cars is not being rented out then we could possibly create a way where people can rent a Thrifty car straight through our platform as well.”
Right now the company has over 350 cars on the platform across Sydney and Melbourne and around 800 borrowers that are fully approved. There have been just over 23,000 bookings that have been transacted and on average car owners using the service are making $2,500 a year in passive income from sharing their cars.
As the company now begins to scale not only will there be a focus on expanding reach within Sydney and Melbourne, but Car Next Door will be looking to expand into Perth, Adelaide, Canberra, Geelong, Newcastle and Brisbane.
There are also a couple of new products that the startup wishes to launch. These include a car sharing service placed at airports and a new way for their platform to be integrated with rental car companies. This will allow these types of companies to offer their cars on the platform as well.
To date the company has raised over $2 million across a few seed rounds. Initially there was $250,000 put into the business to kick things off in 2012. In October 2013 the team raised $650,000 as convertible notes and then there was another small convertible note round at the end of 2014 for $220,000. Last month Davis closed a $1.1 million round led by Trevor Folsom from Elevation Capital.
Others in on the deal included Impact Investment Group, Bjorn Behrendt from Mad Paws and a handful of other private investors.