South African start-up, FlexClub, has secured an additional $5 million (R75 million) in funding to scale its car subscription marketplace, while adding to an initial $1.2 million it raised in 2019.
The latest fundraising round is led by Kindred Ventures, early backers of global tech businesses such as Uber, Postmates, and Coinbase, including the buy-in they have seen from partners like Avis and other major automotive distributors.
Established in 2019, by co-founders Marlon Gallardo, Rudolf Vavruch and Tinashe Ruzane, FlexClub is an online marketplace that connects customers looking for flexible access to long-term cars with its partners offering car subscriptions.
Through the FlexClub marketplace, members pay an all-inclusive monthly subscription for a car, earning valuable rewards over time based on their driving behaviour. Members earn points that they can redeem when spending with one of our rewards partners, including if they decide to purchase the car.
Since it collaborated with Uber in Mexico and South Africa in 2019, the FlexClub model of all-inclusive car subscriptions has gained significant traction. The company said its car subscription marketplace is now also being extended to retail consumers, who are also rewarded for safer driving while subscribing for the vehicle thanks to their ‘Club Rewards Program’.
According to FlexClub co-founder and CEO, Tinashe Ruzane, the latest fundraising round demonstrates the recognition by some of the world’s foremost venture investors of the potential for the FlexClub model and the confidence in the strength of its leadership team deeply experienced in mobility.
Ruzane said that FlexClub’s partners are quite diverse, ranging from small fleet owners to multinational fleet operators looking to easily launch car subscription offers on the FlexClub marketplace without requiring significant investment in new technology, infrastructure or operations.
Just two years ago, FlexClub’s partners were predominantly individuals looking to earn passive income from owning one or two cars offered on subscription to members.
A year ago, private debt funds entered the scene with an interest in the yield opportunity from funding car subscription fleets. Today, partners on FlexClub also include major brands like Avis with tens of thousands of vehicles in their fleet and the operational wherewithal to scale across multiple cities on the FlexClub marketplace.
“Our members are drawn to the fact that, in just a few clicks, they can get flexible access to a car that suits their needs in under a week.
“Members can choose vehicles from an array of reputable partners, without the need for large upfront deposits, high balloon payment obligations, or rigid long-term vehicle finance contracts; and they always have the freedom to buy the car, return it, or swap it at any time, without incurring any penalties or unexpected costs.”
“By enhancing and simplifying the car shopping experience for our members, and better managing the risk for our partners, FlexClub is supporting the redesign of the auto commerce landscape,” Ruzane said.