Motorway is a UK startup enabling professional car dealers to bid for private cars at auction. The startup had quick success by eliminating a lot of friction. It has now raised £ 48m / $ 67.7m in a Series B round led by Index Ventures along with new investors BMW i Ventures and Unbound. Existing investors Latitude and Marchmont Ventures also participated. The funding will be used to expand the platform and add to the current 160-strong team.
The startup claims it will allow consumers to sell their car for up to £ 1,000 more than they would any other way by uploading its details through a smartphone app that also uses computer vision to track the condition of the Evaluate cars. Over 3,000 professional car dealers then bid on the vehicle in a daily online auction. The highest offer wins the car that is picked up by the winning dealer within 24 hours free of charge.
Motorway says it has sold 65,000 cars since its launch in 2017, with £ 50 million in revenue in May 2021 alone, £ 2.5 million in transactions per day and more than 4,000 car sales completed per month. With only 5% of all vehicles currently sold online in the UK, there is plenty of room for this market to grow.
Tom Leathes, CEO of Motorway, said, “For half a century, inefficient offline processes have resulted in bad deals and experiences for both auto salespeople and dealerships. The freeway has fundamentally changed a broken experience that leaves everyone unsatisfied – and we’ve turned it into a superior online experience where everyone wins. By eliminating the middlemen, both the consumer and the car dealer have a better deal, all from home and without stress. Our incredible growth so far is a testament to our focus on creating more value through technology – and this investment will provide the fuel to take the highway to the next level. “
Danny Rimer, Partner at Index Ventures, said, “We’re always looking to invest in companies that really turn an industry upside down and meet real customer needs. We found that on the Autobahn. The team has built an incredibly powerful platform backed by great technology and a deep understanding of the challenges for both consumers and car dealers alike. The autobahn has quickly become the first port of call for tens of thousands of people selling their cars. ”
Motorway has previously raised £ 14 million in venture capital since it was founded by Tom Leathes, Harry Jones and Alex Buttle in 2017.
In an interview with me, Leathes added, “COVID has been a real accelerator for something that has already happened. The auto industry is shifting to the internet and that’s partly because people are buying their next car online, but it’s also about dealers changing the way they do business, where they buy their cars. It forced this change that they have long resisted and now they are embracing it, so it’s a fundamental shift in the industry. And that’s why we see such a great opportunity to provide the rails to help both sides of the market get online. “
Rimer added, “It’s rare that you have founders who have worked in multiple successful and less successful startups that have this scar tissue and success and are now seizing a much bigger opportunity. The business model is really important to us because instead of owning inventory and then having to get rid of your inventory, much like the difference between Nat-a-Porter and Farfetch. Motorway’s marketplace is just like Farfetch – they have no inventory, which means that they win just by providing that platform for buyers and sellers. So the risk of what the money is used for building the company is much lower. “