Rocket Internet, the German ‘startup factory’ and e-commerce behemoth, is de-cloaking its latest venture today. Founded by two ex-McKinsey management consultants, Peter Baumgart and Maximilian Vollenbroich, Carspring is a marketplace for pre-owned cars.
The company, which is initially launching in London, connects sellers of pre-owned vehicles with prospective buyers. It promises to deliver your newly bought car right to your door, whilst also removing many of the other hassles typically associated with purchasing a used vehicle.
“The used car market is very peculiar and not very transparent to the general public. Selling or buying your car can be quite a hassle: time consuming research for the right model and the best offer, sleazy salesmen, the fear of buying a lemon,” explains Carspring co-founder Maximilian Vollenbroich.
“With Carspring we want to change all this and make buying and selling a car easy and convenient for everyone. Carspring is a modern online marketplace where buyers and sellers can deal their cars the easy way. In general, we see ourselves as matchmakers between sellers and buyers of used cars — not salespeople.”
The reference to being “matchmakers” is deliberate. In addition to spending time at McKinsey — typical for a Rocket Internet recruit — Carspring’s other co-founder Peter Baumgart previously worked in online marketing at eDarling, one of Germany’s biggest online dating sites.
In the same way that online dating attempts to remove the friction involved with meeting new prospective dates, by “digitising” the pre-owned car-buying process, Vollenbroich believes Carspring can be more effective in the way it matches sellers and buyers, specifically through increased transparency.
“Having had a few rather unpleasant encounters when buying my first cars and also knowing the industry quite well from my time as a management consultant at McKinsey in which I also did a research project on the future of automotive retail, I am convinced that there must be a better and more efficient way of buying and selling cars, especially used ones,” he adds.
To that end, all cars sold on the site are checked and tested by the company’s inspectors and Carspring handles the associated paperwork of any subsequent transaction. It also offers a 14-day test drive and a 60 day guarantee. The inspection, valuation and delivery is free, but the company takes a commission on any car sold.
“At Carspring, there is no middleman when buying or selling a used car. Finding the right buyer for any car and guaranteeing a high quality enables us to take a markup for our services from 5-10 per cent, depending on the value of each car sold. This is how CarSpring makes its money,” explains Vollenbroich.