Tech: Collaborate’s car-subscription biz scores landmark Hyundai deal, shares accelerate
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Digital market platform Collaborate (ASX:CL8) has scored a win with Carly, its online car-subscription business.
The company has inked a distribution agreement with #10 global carmaker Hyundai, allowing customers to sign up to Carly subscription vehicles via Hyundai’s national dealer network.
Its a landmark deal in the nascent car-subscription market in the sense that Hyundai is the first vehicle manufacturer in Australia to throw its support behind a subscription business.
Investors cheered the initial announcement, send CL8 shares almost 90 per cent higher in morning trade:
A number of competitors are looking to gain traction in the market for car subscriptions, in response to changing consumer preferences.
Carly competes in the space with other new entrants, including Carbar and HelloCars.
As part of the deal, the Hyundai will retain ownership of its vehicles while using the Carly service to offer subscriptions across a range of models, both used and new.
Participating dealers across the national Hyundai network will then be able to generate an alternative source of recurring revenue. Hyundai is Australia’s third largest vehicle manufacturer with a network of 172 dealerships nationwide.
Carly will take a cut of the proceeds via an intermediary role, in which Hyundai will use its platform “to facilitate and manage the subscription relationships between Hyundai dealers and vehicle subscribers”, the company said.
Hyundai will throw some marketing spend behind the deal, in the form of a digital advertising campaign.
The Hyundai deal follows two other partnership agreements Carly signed in the middle of this year, including a deal with Turners which saw the New Zealand-based automotive group take a 12 per cent stake in CL8.
At the time, Collaborate CEO Chris Noone told Stockhead the company was strategically positioning itself for “fundamental changes happening in consumer behaviour” the Australia’s auto industry.
Hyundai’s Australian CEO JW Lee said the strategic partnership was in response to those shifts.
“The future of personal mobility will not be based solely around vehicle ownership, and Hyundai will adapt to changing consumer demands,” Lee said.
Also rocketing higher this morning was Dropsuite (ASX:DSE), the cloud-based data storage platform. The company announced it has signed a revenue-generating agreement with 1&1 Ionos, a global internet service provider based in Germany that serves around 8 million SME customers. DSE’s product will be deployed for email archiving and backup functionality on the Ionos platform.
But things weren’t so rosy for semiconductor manufacturer Revasum (ASX:RVS), with shares in the company falling by more than 25 per cent after a trading update. The company said it had seen “delays in the ordering and scheduled delivery times” for sales of its Silicon system products, and downgraded 2H 2019 revenue guidance to a range between $US7.5m–$US10m (down from $11m–$13m).