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U.K. Online Car-Buying Platform Carwow Raises £12.5 Million Series B Led By Accel | DrivingSales News

U.K. Online Car-Buying Platform Carwow Raises £12.5 Million Series B Led By Accel

January 18, 2016 0 Comments


Carwow is a U.K. website that believes it is providing a better way to buy a new car. The four-year-old startup has now raised a £12.5 million Series B led by Spotify and Dropbox backers Accel, who reportedly attempted to get in on the last round, but failed.

This follows a £4.6 million Series A investment in December 2014, bringing the total raised to £18.4 million. Other participants in the latest funding round include previous investors Balderton Capital, Samos Investments and Episode 1 Ventures.

Who is Carwow?

The company was founded in 2010 and originally launched as a car review aggregator before becoming a platform with the goal of improving the experience of buying a new car. Its service allows consumers to compare offers online and buy directly from “trusted” dealers that are registered with the platform, thereby avoiding the need to haggle over price.

The concept is that this will provide greater transparency. Co-founder and CEO James Hind explains that car buyers traditionally turn to their nearest dealership who provide a headline price and follow up with a claimed discount. However, customers rarely have the data required to compare that offer, so they cannot be certain if they’re getting a good deal.

Carwow has turned this model around. Customers specify the make, model and features that they would like to buy, and subsequently receive offers directly from dealers through the company’s platform. They can compare the various offers by price, location of the dealer, reviews of the dealer, and what is in stock. The customer can then decide whether to contact a dealer based on their offer, by using anonymous messaging through Carwow.

Hind says that although dealerships were initially resistant to the concept, they have since become positive about the model because they receive very high quality leads from Carwow. By the time a customer contacts a dealer, they have a good idea of the specific car and extras that they want to buy, and their purchase intent is beyond doubt.

The service is free for consumers, and the company says that buyers save an average of £3,600 on their purchase. Carwow believes that both consumers and dealers benefit greatly from the service, as they avoid the time-consuming process of a traditional sales experience, including haggling over price.

“We’re excited to roll out our service even further on the back of strong growth in 2015,” said Hind. “A new car is an important purchase, typically a person’s biggest after their home. At Carwow, we enjoy working with the industry to make things simpler and more efficient for all involved. This new round of funding gives us the firepower we need to change the way the U.K. buys cars.”

Carwow intends to use the new funding to fuel further growth through marketing and brand-building, as well as improving their service through new offerings and products.

Zeinab Salem, of Mercedes-Benz of Grimsby, appreciates the value of the service. “Car buyers are so much better informed now, and it’s likely that they’ve chosen the make and model of the car they want to buy next before they even step foot in a showroom – they simply need to make an informed and educated decision about who to buy the car from,” Salem said. “Carwow is a fantastic and innovative way for customers to compare deals available in the marketplace, and it makes dealers fight harder for their precious business.”

Fred Destin, a partner at Accel, will be joining the board. He said in a statement that Carwow reminds him of property listings aggregator Zoopla. “They’re changing the discovery experience through a superb online platform and better information and are creating a win-win for consumers and dealers, brought to you by a wonderful founding team,” Destin said.

About the Author:

The DrivingSales News team is dedicated to breaking the relevant and the tough stories affecting car dealers. Have questions for DrivingSales News? Reach the team at news@drivingsales.com.

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