The Washington-based business supplies dual-control cars and 4x4s or commercial vehicles with tow bars, on a daily-hire basis, to driving schools and accident management companies, as well as private individuals looking for something out of the ordinary.

End users are mainly clients of accident management companies whose vehicles are off the road due to a traffic accident, or need major mechanical repairs.  Car 2 U is also planning expansion into various business and commercial sectors to provide its niche vehicles for work and leisure purposes.

As well as buying new vehicles, Northstar’s investment – supported by the European Investment Bank, One North East and the European Regional Development Fund – will create a number of back-office and sales jobs.

The remainder of the funding will be used to develop further the bespoke software that gives Car 2 U a distinct advantage over competitors.  Hand-held PDAs carried by its delivery drivers ensure vehicle availability is updated in near real-time, minimises paperwork and administration costs, improves operational efficiency and helps to reduce CO2 emissions and fuel costs by eliminating wasted journeys.

'We have invested a lot of time and money in this software which helps us better-manage the business and deliver a very high standard of service to customers by providing them with near real-time electronic information,' said the company’s managing director, Gillian Frary.

'In this sector, providing exceptional customer service is paramount – and this is reflected in the fact the business has already performed well since we started it in February 2010.  This new investment gives us the opportunity to broaden our fleet, offer new and existing customers a better range of vehicles and help us maintain our already high levels of customer service.'

Rebecca Crawford, of Northstar Ventures, added, 'We are delighted to be working alongside Car 2 U. It is a very exciting, young North East-based company, and has a great opportunity for growth within the market.  Our investment will help it to expand its fleet and workforce, enabling it to operate at its full potential.'

Mark Irving and Ian Lawson of Irving Ramsay Limited provided corporate finance advice to Car 2 U, introducing the investment opportunity to Northstar and supporting the company through the funding process from business plan to legal completion.

The company was advised by Ward Hadaway Solicitors and Paul Lowson of PL accountancy, and Northstar by Watson Burton.