CarNextDoor.com.au is an online platform that allows car owners to effectively rent their cars out to users as a way of making money on the idle capacity of their vehicles to people who need them for ad hoc journeys.
Founded by Will Davies (pictured right) and Dave Trumbull in 2012, the company hit the headlines last year when they appeared on Shark Tank and convinced legendary investor Steve Baxter to make a $300,000 capital injection for just a 4 per cent stake in the business.
More than 30,000 screened and checked members have signed up to use the service and there are now more than 850 registered cars in Sydney and Melbourne.
Car Next Door was named last week as one of 200 outstanding businesses in Westpac's Businesses of Tomorrow program, and now it has its sights set on conquering the Queensland capital.
Business News Australia spoke with Will Davies, and asked him about Car Next Door's expansion plans and how to approach the tricky task of sticking your hand out for funding.
You've just launched in Brisbane, talk us through what's happening?Well, we launched in Sydney in 2013 and then about a year later we went to Melbourne, and Car Next Door is working really well in both of those cities. We've got 500 cars in Sydney and 350 in Melbourne and Brisbane has always been a fantastic city for us and we wanted to go there.
There have been regulatory hurdles in Queensland which has sort of delayed us starting in Brisbane, but we made the decision to go there and it's going really well.
How many cars, how many users?So, there's 10 cars in Brisbane at the moment and it is definitely early days, and we have around 400 users so far and they're getting booked out pretty well, so that's really good. We really think there will be plenty of take-up from here and I think the Brisbanites are taking it well.
Do you think the Brisbane launch will have the same take-up rate as in Sydney and Melbourne?When we started in Sydney the platform was brand new and wasn't as user-friendly as it is now, so we'd expect to be getting going faster than what we did. But it has been on a par with what we saw in Melbourne and then it really took off after just a few months. You just need people to get their head around it and become familiar with the idea, but once they do that then they you know it grows and grows quite exponentially.
So, word of mouth is a key driver, excuse the pun, for you guys?Yeah, exactly it's a huge word of mouth type of business. Most people hear about us through their friends so that's how we grow but you need to get those first 400 or so people using it, and when you do that's awesome because then you have 400 people out there who all start talking about it and then you can really pick up from there. We really need more cars and we're working hard to push a lot more car owners on the platform.
Do you have any definitive expansion plans from here?Look, Brisbane is where we're focussed at the moment but the next cities are Adelaide to Canberra and potentially Geelong. We've had a lot pull from Geelong as well so those are the key ones that we're looking at now.
You're working with Shark Tank's Steve Baxter after landing a deal with, what's your working relationship like with him?Steve's one of our investors and after Shark Tank he invested $300,000 into it and he's been fantastic, actually. I was expecting that he would be too busy and it would be hard to get help but he's been really, really, valuable and very forthcoming with advice when I've asked for it. So, typically we go to Steve if there's some big problem or big question and we get to sit with him and talk to him and we talk through the issues. I communicate with him some way or another once or twice a month, we might have a serious conversation about twice a year, but you know there might actually be little bits and pieces once or twice a month.
Steve Baxter gave us a candid interview recently saying to be an entrepreneur you have to go to bed with a pain in your gut, you're risking people's livelihoods.Oh, yeah I read that interview. You've definitely got to treat peoples' money with respect. He said that often entrepreneurs, they just go in expecting that the investor's money is going to be forthcoming and it's their God-given right to get that money. But I really like the way he kind of sees it like a transaction, much like if you go and buy a shirt. You've got to like the shirt and you've got to want the shirt. It's got to be worthwhile for the money you're giving away to do it. So, I've been really careful to make sure with every investor, including Steve, I give them a monthly report to see exactly how we're going. I've never had an investor come to me asking 'where's the information, you've taken my money what are you doing with it?'. Because if someone's giving us a massive gift of a large sum of money and we don't treat it with respect then that's no good. If you think there is no obligation, then you're an idiot.
Are you happy to reveal turnover figures? I'm hearing two to three million dollars a year.You know how people are really secretive about how they're going with things, which must annoy the shit out of you, I believe if there's a good technical reason for being secretive then fair enough. But I think that a lot of people are just secretive for the sake of it, so I think with these figures, if you're talking about run rate then the amount that's running to the platform now is well above $4 million.
You did a $2.5 million capital raising last year, do you have any further ones planned?We raised a chunk of money from Caltex last year, but we are looking to raise again in the next few months but we're putting it together at the moment so we're looking to raise between $3.5 million to $5 million by October.
What are your key pieces of advice for entrepreneurs and scale-ups trying to secure funding?
The main thing is whenever you meet someone you keep in touch with them. I send out updates to most people I meet and I think you just need to let people know what you're up to. You know there are people out there that take the money but they don't keep in touch, so when I come to do a capital raise I've got this good group of people who I've kept in touch with over a period of time. I let them know we can hit our goals and we're moving forward so we're not trying to reintroduce ourselves from scratch again.
So, in summary everyone you meet, keep in touch with them once every few months and then tell them what your goals are and show them that you're achieving them.
Business News Australia
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