SG Fleet acquires strategic stake in sharing economy via Collaborate Corporation

Technology company Collaborate Corporation (ASX: CL8) has received a significant operational boost courtesy of prominent fleet management and vehicle leasing company SG Fleet Group (ASX: SGF).

SG Fleet has decided to invest $2.2 million into Collaborate and has thereby acquired a strategic stake in the sharing economy focused company.

In a statement to the market, Collaborate said that it had conducted an equity placement at a price of $0.014 per share in which it will receive over $2 million of funding in exchange for ceding a portion of the company to one of Australia’s most established fleet management firms.

The deal is also expected to create significant synergies between the two companies given that their operations overlap rather synchronistically.

Currently, Collaborate is squarely focused on promoting its sharing economy business model and mobility solutions for consumers.

The company’s core business is car subscription offering Carly as well as a range of peer-to-peer vehicle rental offerings such as DriveMyCar, MyCaravan and Mobilise.

Welcome to sharing

In essence, Collaborate offers a suite of branded peer-to-peer marketplaces which enable vehicle owners to engage directly with customers that would like to rent them.

By connecting owners and renters directly, the company says it can monetise assets that would otherwise sit idle and depreciate without generating any passive income for owners.

The sharing economy is a rather new market niche that has developed over the past decade.

Existing giants of the industry include property platform Airbnb which launched in 2008 and Uber, launching a year later. Uber listed on the NYSE in May this year – the largest IPO of 2019 while Airbnb is preparing its own public market debut next year.

Collaborate is seeking to emulate the core idea of the sharing economy by appealing to the so-called mantra of “access over ownership”, whereby consumers and businesses alike can access goods and services with owning them outright.

The shift towards this access-focused distribution of assets has been facilitated and fuelled by the rapid evolution of digital and mobile technologies that have made it easier for services to be advertised, goods to be tracked and customers to find what they want quickly and efficiently.

According to an article published by the World Economic Forum, the sharing economy “is no longer a millennial preference, but a part of modern society”.

Moreover, the industry’s growth is largely being driven by a growing middle-class – a trend that is occurring in multiple countries simultaneously and thereby indicating a strong likelihood for long-term growth.

Under the agreement with SG Fleet, Collaborate will obtain vehicles to facilitate further growth in the Carly business and expand the number of vehicles it is able to offer to potential customers.

Meanwhile, SG Fleet has an established presence in the emerging mobility solutions market within Australia and already offers tailored fleet management and leasing services which means the two companies have a similar target market.

SG Fleet currently offers vehicle sharing solutions to a range of organisations and provides mobility consulting services to companies “moving towards an integrated, multi-model transport approach for their employees”, the company said.

“We are constantly introducing new, high value-add solutions to both corporate customers and consumers to cater for their rapidly evolving mobility requirements,” said Robbie Blau, chief executive officer of SG Fleet.

Mr Blau added that SG Fleet’s investment in Collaborate is expected to strengthen the company’s ability to widen its offering “as demand for greater transport efficiency and flexibility intensifies”.

“This complements our current core business activities and opens up additional revenue growth avenues,” he said.