- SG Fleet Management bought $1.74 million worth of Collaborate shares and will have a 13.70 per cent interest in the company
- It comes after Collaborate Corporation raised $2.2 million during a recent share placement
- In addition to the placement, SG will provide Carly with 100 vehicles, with a significant number of vehicles to be supplied if the demand is there
- Funds from this placement will be used to fund the continued growth of the Carly and its rental business DriveMyCar
- Collaboration Corporation is up 7.14 per cent on the market today and is trading at 1.5¢ apiece
SG Fleet Management, a subsidiary of SG Fleet Group, has bought $1.74 million in Collaborate shares and will subsequently hold a 13.7 per cent interest stake in car rental company Collaborate.
The news comes after the rental company recently completed a capital raising program, generating $2.2 million in a recent share placement.
The strategic investment from SG Fleet follows the company’s launch of its Carly franchise in March this year.
Carly is Australia’s first flexible car subscription. The customer uses the service to rent vehicles, earning the opportunity to change their car every month to better suit their lifestyle.
SG Fleet are specialist providers of fleet management, vehicle leasing and salary packaging services. The company has a presence across Australia, United Kingdom and New Zealand.
In addition to the placement, SG will provide Carly with 100 vehicles.
Carly generates revenue through the rental subscriber service, creating an average profit margin of $303 per vehicle, per month. This rate is based on an average monthly customer subscription rate of $863 per month.
Collaborate CEO Chris Noone says this deal shows the potential of Carly.
“We look forward to engaging with the SG Fleet management team to unlock significant synergies over the coming months,” Chris said.
Collaborate Managing Director Adrian Bunter says that shareholders should not underestimate the significance of this deal.
“We are very pleased to welcome SG Fleet as a significant investor in, and commercial partner with, Collaborate, Adrian told the market.
“This is a highly strategic relationship and I thank Chris Noone for his leadership and execution in quickly making Carly,” he said.
Upon completion of the investment, SG Fleet has the right to nominate one person to the Board of Directors at Collaborate. SG has chosen CEO Robbie Blau as their representative.
“I am very pleased to welcome SG Fleet CEO Robbie Blau to the Collaborate Board.
Robbie’s experience and stature in the finance and automotive industry will greatly enhance the growth potential of Collaborate,” Chris added.
“Our investment in Collaborate further strengthens our ability to widen our offering as demand for greater transport efficiency and flexibility intensifies,” Robbie said.
Funds from this placement will be used to fund the continued growth of Carly.
This latest agreement with SG Fleet follows the recent agreements with automotive manufacturers and dealers including Hyundai and Suttons Motor Group.
Collaboration Corporation is up 7.14 per cent on the market today, trading at 1.5¢ apiece at 1:42 pm AEDT.