QUEENSLAND car subscription business Karmo is said to have become Australia’s biggest after buying out rival Motopool and merging the operations.

The two had a combined revenue in the last financial year of $33 million, which the company said puts the merged business ahead of the publicly-listed subscription company Carly and private company Carbar.

Karmo said further growth over the next year will come as it expands overseas and adds an additional 5000 vehicles to its fleet.

It has also secured a $138 million debt facility from the finance divisions of Volkswagen and Toyota.

Karmo founder Nick Boucher, who will stay on as CEO after the buyout of Motopool, said the finance facility will push the business further and play a major part in the global car subscription industry that is estimated to be worth $66.7 billion globally by 2032.

Much of the growth is attributed to more awareness of car subscription and “a generational shift in the perception of vehicle access and ownership, driven by the desire for flexibility, affordability, and a hassle-free experience.” 

With Mr Boucher as CEO, the business will also have Motopool CEO Andrew Rickett as its new chief operating officer, Karmo CFO John Bush, former Motopool COO Laura Harewood taking on the newly-created role of chief revenue officer, and former Karmo COO Sam Zammit becoming chief product officer with a focus on driving innovation and local and international expansion.

Karmo said the new entity will service thousands of customers across all key Australian capital cities. The offerings to customers include a range of new models with more than 30 brands from budget-friendly cars, commercial utes and vans to high-end luxury vehicles, including hybrid, plug-in hybrid and full-electric vehicles. 

Mr Boucher said Karmo’s purchase of Motopool solidified its position as Australia’s number  one car subscription provider. 

“Karmo’s impressive growth has underscored the shift in how individuals and businesses experience new vehicles, increasingly recognising the appeal of ‘access over ownership,” he said.

“This acquisition is a significant step forward in our journey, allowing us to accelerate our ambitious growth targets through our focus on a seamless customer experience, continuing to build out our proprietary software platform, expand our range of  vehicles, and extend our reach beyond capital cities into regional areas across Australia. 

“Motopool brings an exceptional team and a strong foundation to our shared mission.”

Andrew Rickett, former CEO of Motopool and now COO at Karmo, said: “We’ve been the quiet achievers in this industry, respectively building Motopool and Karmo into Australia’s top car subscription providers. 

“None of this would have been possible without our dedicated teams, who meet the mobility needs of thousands of customers each day across diverse market segments. 

 “Now, by joining forces, we’re creating a clear market leader with unmatched depth and expertise. Together, we’ll be able to accelerate innovation and expand our services and product offerings while staying true to our commitment to a customer first experience that meets the evolving needs of today’s and tomorrow’s  consumers.”

Michael Higgins

The move was supported by car subscription software and management business Loopit. Its co-founder, Michael Higgins, said: “We’re excited to see continued growth and consolidation in the vehicle subscription industry, with Karmo securing $138 million in funding from Toyota and VW’s venture arms to acquire Motopool.

“This highlights the growing demand for flexible mobility solutions across various vehicle segments and reinforces what we’ve long known — vehicle subscriptions are becoming an increasingly popular choice for consumers.”

The CEO of Carly Car Subscription, Chris Noone, said the move was positive for the car subscription industry as a whole and recognition of its growing prominence in the automotive and mobility sectors in Australia.

“The rapid growth of Karmo, Carly and others demonstrates the significant consumer and corporate demand for flexible access to vehicles that is longer than a rental and shorter than a lease,” he told GoAutoNews Premium.

“We have long recognised that the pureplay car subscription companies will be dominant in the market, while companies that add the word ‘subscription’ to their rental or leasing websites, and don’t truly embrace the unique car subscription model, will come and go.

Chris Noone

“The financing provided by Volkswagen and Toyota will help to highlight the opportunity for OEM’s, dealers and vehicle leasing companies to partner with dedicated subscription providers to leverage the many advantages of car subscription.”

Karmo has an online subscription service that offers flexible, short-term leasing options allowing customers to switch vehicles every few months, scale up as their family grows, or to drive the latest models on the market.

Its model covers insurance, servicing, depreciation and maintenance so the customer is only responsible for fuel and tolls.