8 July 2014
The business, which is headquartered in Leeds after moving from Huddersfield, is looking to grow its 500 strong vehicle fleet to 750 and increase its membership from 16,000 to 25,000 by 2011.
City Car Club bought Leeds-based WhizzGo last Septem
The cash injection will also cover costs associated with the acquisition of WhizzGo.
Managing director James Finlayson said the group had seen a 90% growth in membership in the past 12 months, with the recession helping as people looked to save cash.
City Car Club has its largest operation in London and also highly successful and growing operations in Edinburgh, Leeds, Manchester, Brighton, Bristol and seven other cities, including Sheffield and York.
The club is also opening up new operations in Cardiff and Glasgow later this year.
City Car Club, which also operates a pay-as-you-go rental scheme, launched in Huddersfield last June.
Its head office employs 20 people and the business has 40 staff in total.
Established in 2001, City Car Club has seen an expansion in its membership base as people look to rent cars to use instead of buying them and try to improve their green credentials.
Members of the club have 24-hour access to cars which are parked on the street in convenient locations and can be booked by the hour by both residents and business.
Mr Finlayson, City Car Club's largest shareholder, said: "Our strategic acquisition of WhizzGo, combined with a 90% growth in membership over the course of the last 12 months, meant we needed additional funding to keep up with demand."
The car club gives its members access to locally parked cars that can be booked online or over the phone for less than £5-an-hour. It is seen as a cost effective and greener alternative to owning a car.
Mr Finlayson added: "Membership of City Car Club saves our members an average of £1,800 each year and the downturn has really made people think twice about car ownership.
"A large reason for our growth has come from demand from businesses to reduce their transport costs as well as reducing their carbon footprint. Membership to a car club delivers on both fronts.
"This is a business concept that has been ahead of its time and is also very capital intensive meaning a relatively slow burn to profitability. It has been all about securing long term parking partnerships with city councils, getting to critical mass and getting the right ratio of members to cars to maximise revenue per car.
"We have now done much of the hard work and are all certainly looking forward to reaching profitability later in the year."