Cartrack vs Netstar

Karooooo and Altron are two of South Africa’s largest and most respected technology companies. They share a common denominator: vehicle tracking and recovery.

Karooooo owns Cartrack, which offers solutions for transportation-related industries that use fleet management, asset recovery, and insurance.

Altron owns Netstar, a trusted brand and pioneer in the vehicle-tracking and stolen-vehicle recovery industry in South Africa.

Netstar was founded by Martin van Breda and Conrad Walker in 1994 and launched proactive monitoring and fast vehicle recovery in 1997. Altron acquired Netstar in the late nineties.

Karooooo founder and chief executive Zak Calisto started Cartrack in 2001 as a joint venture with Netstar.

Cartrack separated from Netstar in 2004, and under Calisto’s guidance, it became a powerhouse in tracking, data analytics, and business intelligence in South Africa.

Today, Cartrack and Netstar are competitors in the vehicle tracking, recovery, and analytics market.

Netstar specialises in vehicle and fleet tracking and recovery. It primarily operates in South Africa with smaller operations in Italy, Southeast Asia, and Australia.

In its latest annual results, Netstar generated 80% of its revenue from its South African operations, with the remainder from its international operations.

Netstar also has a partnership with Toyota where Toyota and Lexus vehicles are pre-installed with the company’s technology.

It provides these vehicle owners vehicle tracking and GPS location capabilities like road-side assistance when activated by the user.

Netstar currently has 1.9 million subscribers, of which around 20% are international subscribers, 49% are South African customers, and 31% are Toyota subscribers.

Netstar’s subscriber base has increased significantly since 2019, when it launched its Toyota partnership, and has experienced an average annual growth rate of 17% since 2018.

Over the last 12 reporting months, Netstar generated R2.2 billion in revenue. Since 2019, Netstar achieved an average annual revenue growth rate of 7.5%.

It also produced R267 million in operating profit over the same period, representing an operating profit margin of 12.2%.

Cartrack, owned by Karooooo, operates primarily in South Africa with smaller operators in Europe, America, the rest of Africa, and Southeast Asia.

Currently, 76% of its subscriber base is in South Africa, with the remainder from its other regions of operation.

Cartrack has a subscriber base of 2.14 million and experiences an average annual subscriber growth rate of 14.3%, a lower growth rate than Netstar.

This has resulted in Netstar closing the gap between itself and Cartrack based on subscriber numbers.

Despite having almost as many customers as Cartrack, Netstar generates nearly 50% less revenue from these subscribers than Cartrack.

Over the past 12 reporting months, Cartrack generated R3.84 billion in revenue, 1.75 times more than Netstar’s R2.2 billion.

This is most likely because Netstar’s Toyota clients make up 595,000 of Netstar’s total subscribers.

Due to profit share agreements between Netstar and Toyota, these clients will most probably have a lower ARPU than a straight client, as is the case with Cartrack’s clients.

Since H1 2022, Cartrack’s average annual revenue growth has been 16.27%, while Netstar’s revenue increased only at an average annual growth rate of 11.44%.

Cartrack also performs better than Netstar when looking at profits, generating operating profits almost four times greater than Netstar.

Cartrack has also achieved a higher average operating profit margin than Netstar, at 29% since H1 2022, compared to 12% for Netstar over the same period.