Just ten months after disclosing a £1.3 million seed round, UK car buying platform Carwow has made another fundraising pitstop. The London-based company has raised a £4.6 million Series A round, led by Balderton Capital, with participation from Episode 1 Ventures, and Samos Investments.
All three VCs are previous backers of Carwow, so we can flag this up as a follow-on round for the young startup, which now claims to have moved into pole-position as the leading site for buying a new car in the UK after launching in May last year.
Aiming to reduce the friction involved in buying a new car, Carwow’s website allows consumers to compare offers online and buy directly from “trusted” dealers that are registered with the platform, specifically avoiding the arduous but otherwise necessary requirement to haggle over price, and in a way that potentially introduces a lot more transparency.
It does this via what is essentially a reverse marketplace: users “build” the car they would like to buy — specifying make and model/features etc. — and then receive offers direct from dealers. They can then quickly compare offers by price, location of the dealer, reviews of the dealer and what’s actually in stock. It’s then up to the buyer to decide whether to contact a dealer based on their offer, either by anonymous messaging through the Carwow platform or by giving the dealer a call.
To back up its claim to be the number one new car buying site in the UK, Carwow says it has driven “more than” £150 million in car sales for dealerships (saving users a claimed combined total of £15 million). That’s up from £30 million in sales, as reported in February.
Meanwhile, today’s Series A round is all about stepping on the gas. The injection of fuel will be used to “expand the team further, roll out above-the-line advertising campaigns and start exploring new markets,” says Carwow’s 27-year old CEO James Hind in a statement.
That will likely see Carwow’s brand attempt to reach additional mainstream audiences via traditional newspaper and television advertising as it attempts to race further in front of local competitors.