Second-hand car market Motorway has raised $190m in new funding at a unicorn valuation as the made use of auto current market continues to increase.
The London-based company’s most current spherical was led by Index Ventures and Iconiq, and features additional investments from current backers Latitude, Unbound and BMW i Ventures.
The company acquired early financial investment from Shakil Khan, cofounder of Prima Materia and early trader in Spotify, and secured a £48m round in June.
Khan has been backing the Motorway group since 2004 when he handed them a credit score card with a £50,000 limit to assistance a past venture.
Motorway, launched in 2017, operates a marketplace in which car entrepreneurs can upload their motor vehicles and motor vehicle dealers can bid at a every day auction.
Semiconductor shortages and transportation concerns
A crunch in the offer of semiconductors about the previous yr sparked a lack in new vehicles, pushing the value of made use of vehicles up instantly. The common asking price for utilized autos has jumped 15.2% yr-on-12 months.
It’s also considered that the increase could be down to people’s worries over applying general public transport in the course of the pandemic.
“Folks are not super eager on just obtaining new all the time, but fairly to sweat the asset and get extra price out of it, from an environmental standpoint”
Motorway says it noticed a 300% boost in 3rd-quarter product sales, mounting to $411m from $105m previous yr.
“The employed car or truck marketplace has been incredibly buoyant for the final 3 or 4 decades,” Tom Leathes, CEO of Motorway, informed Sifted in June. Leathes mentioned action had ramped up in the previous 12 months owing to the pandemic.
Danny Rimer, trader at Index, claimed the enhanced demand from customers was also down to consumers’ sustainability considerations. “Folks are not super eager on just acquiring new all the time, but somewhat to sweat the asset and get a lot more price out of it, from an environmental standpoint,” he mentioned.
An business on the up
Motorway is not the only European startup to gain from the increasing demand for applied cars and trucks.
SoftBank-backed Vehicle1, a German applied automobile seller, floated previously this year elevating $2.2bn in an IPO. British startup Cazoo, a 2nd-hand car or truck retailer which was at a person stage the UK’s swiftest developing startup, raised $900m from a SPAC merger before this calendar year.
“The utilised motor vehicle current market is the one greatest retail market in the United kingdom — bigger than food in price, at about £50bn for each yr,” Cazoo CEO Alex Chesterman advised Sifted in June.
Cazoo’s business model is diverse to Motorway’s. Motorway enables individuals to promote their possess automobiles, making use of equipment to enable them photograph and upload their motor vehicles to the site, the place sellers then bid on them. Cazoo, on the other hand, resources its automobiles from auctions and dealerships.
Freya Pratty is Sifted’s news reporter. She tweets from @FPratty