Carbar is Melbourne-based company that started in 2016 and now has 80 employees and growing. The vehicle subscription service, offers a new alternative to traditional car ownership.
The company has ambitious growth plans and to help with that, Carbar has successfully completed a $28.9 million funding round led by IAG and Seven West Media.
The funds will be used to broaden Carbar’s marketing, partnership and technology capabilities, as it looks to further scale its operations in Australia and capitalise on the adoption of electric vehicles (EVs). Carbar has seen a more than 2,000% increase in active subscribers since the last cap raise in July 2019.
If you’re not familiar with the service (FAQs here), there are currently more than 1,100 cars available, with weekly subscriptions costs A$151 for something like a 2017 KIA Rio, right up to A$703 per week for a 2021 BMW 2 series. There is an upfront cost, but you’re not stuck with that specific car, if your needs change, just give them 2 weeks notice and you can switch out for a different vehicle. It’s this kind of flexibility that sets the service apart from a typical lease arrangement.
This fee is a substitute for what you would otherwise pay for owning, maintaining and running a car such as depreciation, interest, registration, insurance, routine maintenance, roadside assist, mechanic faults, faulty and worn tyres and batteries.
Carbar also established an asset-backed security (ABS) facility aimed at funding the expansion of its fleet, with a view to increasing its total proportion of EVs from 5% to 25% over the next few years.
“This round will help us expedite growth in the business and make Carbar a household name. While we are thrilled with our growth to date, we realise that our current round of car subscribers are really early adopters.
Given the experience overseas – in less car obsessed markets – we know that with the right push, this trend of subscription can compete with and rival car ownership. We’ll be leading the charge on this for the entire car subscription industry.
We also believe Carbar will play an instrumental role in the adoption of EVs across Australia as there are few solutions out there helping make these cars more accessible and easier to afford. The global rise of EVs is an inflection point for the auto industry. We want to be a global brand before this trend is fully realised, and in order to do that we need to further accelerate our growth.”Carbar co-founder and CEO Des Hang
“We’re proud to have partnered with Carbar since 2019 and supported its growth as the pioneer of Australia’s car subscription market.
Carbar’s world-class digital capabilities have also provided us with the opportunity to evolve with the mobility needs of our customers, who, in the unfortunate event their vehicle is a total loss after an accident, can now source a new or used vehicle through Carbar and have it delivered.
We’re excited by the opportunities ahead for Carbar and providing the best possible experiences for our customers today and into the future.”IAG Group Executive Direct Insurance Australia, Julie Batch
“Carbar already holds a unique position in Australia’s evolving auto industry. It’s a compelling consumer offering that, with the right push, has the ability to totally change the way we perceive EVs in Australia.
By working closely with Carbar, we aim to accelerate its growth and help more Australians realise the value in car subscriptions and EV technology.”Seven West Media’s Head of Seven West Ventures, Alan Stuart, said:
Shareholders continue to be open to further strategic investment to allow the business to grow and achieve scale.
The funding round announcement follows a year of new commercial partnerships for Carbar. The company manages AGL, Aurora and sonnenDrive’s respective EV subscription programs. Carbar also recently became the first car subscription service in Australia to join the Electric Vehicle Council.