Car rental agency

Automotive tech startup Splend gets $150 million for a fleet of 10,000 electric vehicles

Founder and CEO of automotive tech startup Splend Chris King plans to grow its fleet of electric vehicles to 10,000 by 2024. Image: Supplied.

Australian vehicle subscription startup Splend has raised $150 million to fuel its expansion and fuel its plans to grow its fleet of electric vehicles to 10,000 by 2024.

The funding round was led by UK-based Pollen Street Capital, a private asset manager focused on ESG-focused investing.

Michael Katramados, partner at Pollen Street Capital, said the capital raise would support Splend’s mission to decarbonize ride-sharing and delivery services.

“Splend is committed to supporting its members in all aspects of on-demand driving and the team’s focus on the industry’s transition to green mobility is something we are proud to support,” Katramados said in a statement accompanying the announcement.

The London-based Australian startup raised $3 million in a Series A round in 2017, with subsequent private funding in 2018 and 2020.

Splend, a subscription business that provides cars to rideshare and delivery drivers, as well as industry-tailored vehicle financing, currently rents cars in 10 cities across Australia and the UK through its team of 100 people.

The six-year-old company has spearheaded efforts in the gig economy to eliminate emissions – and will use the capital raise to accelerate that mission, said Splend founder and chief executive Chris King . SmartCompany.

“It gives us that capital and that firepower to execute our plans and grow,” King says.

“Where we want to take the company is to be the leading supplier of electric vehicles.”

The ride-sharing explosion has fueled Splend’s growth

Splend was launched in 2015 by King, then 27, who had previously served as chief financial officer at national electrical service provider KP Electric. The Rich Lister was worth around $46 million in 2018.

The startup’s early years coincided with the broader boom in the ride-sharing industry as Uber and Lyft implemented hyper-growth strategies that fueled rapid global expansion.

As Silicon Valley startups disrupted the taxi industry, King saw a gap in the market to give drivers a better deal than what they were getting from the platforms.

“I saw an opportunity as carpooling took off,” says King.

As a multitude of drivers entered the ecosystem, traditional car leasing and financing lagged behind the needs of the emerging industry.

“Car leasing has not responded to what was a disruptive and new segment that was forming. What was evident was that the usual cookie-cutter way of providing…car financing…and car leasing…just wasn’t working,” he said.

Splend’s offering provides what it claims is superior service on both counts. It offers drivers profitable car leases on better terms than competitors, combined with support in financial management, driver safety to promote “sustainable income” via driving for rigs.

Leader in the adoption of electric vehicles

At the start of 2021, the company pledged to swap its petrol cars in the UK for 1,000 electric vehicles by the end of the year.

King announced at the time that it would also convert half of its 1,500 vehicles in Australia to electric vehicles by the end of this year.

He sees decarbonizing transportation as crucial to the long-term viability of the industry, but says federal and state commitments in recent months have helped the country catch up with other developed nations.

Australia lags considerably behind the rest of EV adoption globally, with just 0.75% of new cars sold in Australia being EVs in 2020. This is compared to 8.1% in the state of California in the United States and 10.7% in the United Kingdom.

“Two years ago, I would say [Australia] was late [behind] the rest of the world,” King said.

But “it’s been really exciting over the last 12 months, in particular. I saw Australia [progress in] giant step.”

Splend’s commitment to a fleet of 10,000 electric vehicles follows action by ridesharing giants to bolster their sustainability credentials.

In 2021, Uber announced it would halve its service rates for EV drivers in Australia to promote EV adoption.

Globally, Uber has also invested, grown Uber Green, its electric vehicle fleet and committed $800 million in resources that it says will help its drivers transition to electric vehicles by 2025.

“I think the next 12 to 18 months are going to be very exciting for the adoption of electric vehicles in Australia,” King said.

King also welcomes the push for tougher regulations for ride-sharing companies and the wider gig economy.

Global measures to ensure minimum income and safety rules to better protect workers will strengthen the whole industry, King said.

He sees government regulation to guarantee minimum wage conditions equivalent to those of employees as a positive element.

“Basically what it does is just put legal minimums in place, which catches the very small, infrequent situations where someone may be paid below the minimum.”

As the ridesharing sector rebalances following pressure on the industry from continued lockdowns, King teases the startup’s plans to diversify based on its growth.

“We also want to be…not just the leader in ridesharing,” he said.

He names an on-demand delivery product, as well as a slew of partnerships that will be announced in the coming months.

“Right now, we’re focused on the ride-sharing and delivery market segments, and we’re a leader in electric vehicles.

“Over time, we want to diversify and bring our offering to other segments and types of businesses.”