Car Next Door raises $2.3 million, looks to equity crowdfunding to close out Series B round
Having raised $2.3 million from investors including existing backers Caltex and Investible, car sharing startup Car Next Door is opening up the rest of its Series B round to users, taking to crowdfunding platform Equitise to raise a minimum of $500,000.
The fresh funding comes after a $4.3 million Series A round raised last year, with over $2 million having come through a strategic investment from Caltex.
Cofounding the platform in 2012 to allow those with cars sitting unused to lend them out to others, CEO Will Davies said the platform has now amassed over 50,000 members and a fleet of more than 1,300 cars across Melbourne, Sydney, Newcastle, and Brisbane.
Over the years, he said, the startup has fielded “numerous requests” from members, many of them sophisticated investors, who wanted to get a share in the company.
“Crowdfunding is the logical way for us to unlock some of our equity for our members. It’s not just about investment, it’s about getting our broad user base even more interested in us and our success and giving them the unique opportunity to invest alongside Caltex and Investible,” he said.
“In 2018 retail equity crowdfunding is going to become do-able, so we see this as the initial step in a wider retail crowd funding effort down the track.”
Equitise CEO Chris Gilbert said Car Next Door is an ideal company for equity crowdfunding, with the sharing economy growing.
“Car Next Door has been embraced by Aussies who now have the opportunity to invest in a startup they believe in, and get behind the car sharing movement, which has such a positive social and environmental impact on the world,” he said.
The offer comes just a few months after the government opened equity crowdfunding up to retail – or ‘mum and dad’ – investors, though amendments to allow private companies to list offers is still going through Parliament.
At the moment, unlisted public companies with less than $25 million in assets and annual turnover are eligible to raise funds, raising up to $5 million within a 12 month period.
To help protect investors, private companies looking to list through equity crowdfunding intermediaries, or platforms, will be required to meet additional criteria, including having a minimum of two directors, and holding financial reporting in line with accounting standards.
Private companies will also be required to have audited financial statements once they raise above $3 million through equity crowdfunding, with this threshold upped from $1 million following industry consultation.
Image: David Trumbull and Will Davies. Source: Supplied.