IAG has stepped up its backing for Carbar, demonstrating the insurer’s confidence in the vehicle subscription start-up’s business model.

The insurer, already a majority shareholder via an investment made in 2019, and Seven West Media co-led in the Melbourne-founded company’s latest funding-raising exercise in which $28.9 million was secured from investors.

“We’re proud to have partnered with Carbar since 2019 and supported its growth as the pioneer of Australia’s car subscription market,” IAG Group Executive Direct Insurance Australia Julie Batch said.

“Carbar’s world-class digital capabilities have also provided us with the opportunity to evolve with the mobility needs of our customers, who, in the unfortunate event their vehicle is a total loss after an accident, can now source a new or used vehicle through Carbar and have it delivered.

“We’re excited by the opportunities ahead for Carbar and providing the best possible experiences for our customers today and into the future.”

Carbar, which also offers a platform for selling and buying used vehicles, intends to use the latest funds injection to support its business expansion plans such as catering to the growing use of electric vehicles.

It is also looking to broaden its marketing, partnership and technology capabilities.

“This round will help us expedite growth in the business and make Carbar a household name,” co-founder and CEO Des Hang said.

“While we are thrilled with our growth to date, we realise that our current round of car subscribers are really early adopters.”

Carbar says its active subscribers have increased more than 2000% since the last capital raise in 2019.