Carspring, the London and Berlin-based startup that makes it easy to buy a used car, has gone quiet, amid reports that its recent £5 million in Series B funding fell through. According to sources, Rocket Internet has pulled its investment in the company, which it co-founded with ex-McKinsey management consultants Peter Baumgart and Maximilian Vollenbroich.
The Carspring site in the U.K. is no longer listing any cars for sale and its website chat remains set to offline. I’ve also tried calling the Carspring telephone number but a recorded message seems to perpetually say all operators are busy.
Neither Baumgart or Vollenbroich could be reached for comment. Meanwhile, a Rocket Internet spokesperson said that “Rocket Internet decided not to invest in Carspring anymore,” and that I should refer any further questions to Carspring directly.
It is not clear why the Series B funding was announced in August despite never being closed. I also understand the deal’s eventual collapse caught Channel 4’s Growth Fund, who were also due to take a minor stake in the company in a media for equity deal, off guard too.
One source tells me that the Series B round was nine months in the making, during which time publicly-listed Rocket Internet blew hot and cold, but was most recently encouraged to go ahead after U.S. car buying site Carvana achieved an IPO. What then changed is unknown, although it does raise further questions about Rocket Internet’s corporate strategy now that it has to keep an eye on its own share price as a publicly-listed company in its own right.
I’m also hearing that Carspring co-founders Baumgart and Vollenbroich may have had a difference in opinion on the startup’s direction going forward. A Companies House regulatory filing shows that Rocket Internet Se has ownership and voting rights of 75 per cent or more, including the right to appoint and remove directors. Neither Baumgart or Vollenbroich are currently listed as a director of Carspring Limited.
Launched in 2015, Carspring is described as an online used car dealership and moves the buying process for a used car entirely online. On the supply side it sources used cars from a network of used car dealers, while the demand side sees it put in place numerous features to make buying online both trustworthy and extra convenient.
This includes mechanical checks to ensure vehicles makes the Carspring grade, a 6 month warranty on cars bought, home delivery, and a 14 day money-back guarantee — all of which would suggest the company and the space it operates in is a capital intensive business.
I’ll endeavour to update this post should I hear back from Baumgart or Vollenbroich, and in case Rocket Internet has anything to add further to publication.