IFM Investors and HESTA have announced a significant investment in an Australian-owned subscription vehicle provider, which boasts one of the largest electric vehicle fleets in the country.
In a statement on Wednesday, IFM Investors said it is acquiring a 49 per cent stake in Splend Group alongside HESTA.
Splend, founded in 2015, is a leading provider of subscription vehicles to rideshare drivers across Australia and the UK.
IFM, which is making the investment via its Growth Partners Fund 2, said the acquisition will support Splend to further expand its fleet and help fund the construction of dedicated rideshare charging infrastructure in Australia, helping reduce the barriers to electric vehicle adoption and accelerate the decarbonisation of rideshare fleets.
“Splend is a high quality, rapidly growing business with a leadership position in Australia and strong growth in the UK. We believe its continued growth will be underpinned by its strong value proposition for customers, its scale and established relationship with Uber, and its use of data and telematics to deliver cost efficiencies,” said IFM Investors executive director for private equity, Adrian Kerley.
“We’re very pleased to be investing in a company like Splend, which fits well with our focus on tech-enabled service companies and energy transition objectives. Splend’s fleet of electric vehicles in Australia and the UK are already reducing carbon emissions by over 19,000tCO2e per annum.”
HESTA’s CIO Sonya Sawtell-Rickson similarly highlighted the fund’s energy transition focus.
“HESTA aims to have 10 per cent of its global portfolio invested in climate solutions by 2030. Innovative investments like this can help us strive to deliver strong, long-term returns for our members while having a positive impact by supporting the transition to a low carbon future,” the CIO said.
“Splend has shown they can deliver efficiencies to customers, cutting costs and emissions, and we’re excited to invest in the next stage of its growth.”
Splend recently also secured a $300 million debt financing facility from Macquarie and a $40 million financing facility from Clean Energy Finance Corporation, providing funding capacity to add thousands of vehicles to its fleet.
Its CEO Chris King said this latest investment will “underpin the next stage of our growth strategy through expanding our offering and developing dedicated EV charging infrastructure, making EVs more accessible and even more cost effective.”
“We believe in EVs because we know how much better off rideshare drivers are without fuel costs. Through supporting rideshare drivers in owning EVs, we can be part of the change to lower our industry’s carbon footprint for good,” King said.
Splend currently has a fleet approaching 7,000 vehicles across both Australia and the UK, with that number growing rapidly. The company’s growth has been supported by structural tailwinds as rideshare companies look to transition fleets to electric vehicles.
