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Car subscription platform Karmo has secured a strategic investment from Eagers Automotive (ASX: APE), Australia's largest listed automotive dealer group, which is taking a 17.5 per cent stake in the company as it pushes past $60 million in annualised recurring revenue (ARR).
As part of the transaction, the Brisbane-based Karmo will acquire Simplr, a used car subscription business founded by Eagers in 2020, adding about $4 million in ARR to the platform.
The integration of Simplr's used car subscription book is expected to complement Karmo's core new vehicle offering, giving the platform exposure across both segments of the subscription market as it targets further growth in 2026.
Karmo, which was founded in 2019 by Nick Boucher and Sam Zammit, describes itself as Australia's largest new car subscription platform, with more than 3,000 vehicles under active subscription.
The platform allows customers to subscribe to a vehicle on a rolling basis rather than committing to traditional ownership or a multi-year lease.
Karmo reached $60 million ARR this month, prior to integrating Simplr, and forecasts purchasing more than 7,000 new vehicles and 450 used vehicles in 2026.
Boucher, the Karmo CEO, says the investment marks a significant milestone for the business and broader subscription category.
“The investment from Eagers Automotive, along with the existing seed investment from Autoleague, is an exciting opportunity for us to accelerate the momentum already in the business and sector," he says.
“Our 90-plus staff have built a business with meaningful scale in a category that is continuing to mature across consumer, business and novated markets.
"Eagers’ investment gives us additional automotive infrastructure, fleet access and industry depth as we continue building the platform for flexible vehicle access nationally.
"We are all very proud of Karmo being one of the only subscription platforms in the world to have a sustainable business model that benefits the dealers, the OEM, Karmo and most of all the customer”
Karmo has grown nearly 11 times over five years and about five times over three years, expanding its base to include operations across five Australian cities and Sri Lanka.
The company acquired rival Motopool in late 2024, pushing annual revenue to about $33 million at that time.
Eagers Automotive CEO Keith Thorntons says the investment in Karmo reflects growing confidence in subscription-based vehicle access as part of the evolving automotive market.
“Karmo has built a strong, scalable business with clear market momentum," he says.
“They have developed real operational capability in a growing category and we see clear strategic opportunity in supporting the next phase of their expansion.”
The financial terms of the stake and the Simplr acquisition price have not been disclosed with the deal expected to be completed on 1 July this year.
Eagers flagged the deal at its annual general meeting on 27 May this year, describing the Karmo investment as offering "low risk but with significant strategic optionality and material upside".
The car dealership group reported record FY25 revenue of $13 billion, underlying EBITDAI of $620.9 million and underlying operating profit before tax of $424.1 million.
The news comes after Karmo in May partnered with energy giant AGL to manage the company's electric vehicle subscription fleet, broadening its reach beyond consumer subscribers into corporate fleet management.
Tony Chong, chairman of Karmo's major shareholder Autoleague, says the Eagers investment validates the platform's trajectory.
"The journey of growth we have supported for Karmo has created immense value, and Autoleague takes great pride in the business it is today," says Chong.
"Eagers Automotive's strategic investment serves as a powerful testament to the Karmo team's excellence, the platform's robustness, and the substantial future potential available."
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