Motorway’s auction platform for second-hand cars raises $67.7M Series B led by Index Ventures
June 14, 2021 at 01:00 AM EDT
Motorway, is a UK startup that allows professional car dealers to bid in an auction for privately-owned cars for sale. The startup has had rapid success by removing a lot of friction in the process. It’s now raised £48m / $67.7m in a Series B round led by Index Ventures, along with new investors BMW i Ventures […]
Motorway, is a UK startup that allows professional car dealers to bid in an auction for privately-owned cars for sale. The startup has had rapid success by removing a lot of friction in the process. It’s 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 extend its platform and grow the current 160-strong team.
The startup allows consumers to sell their car for up to £1,000, by uploading its details via a smartphone. Over 3,000 professional car dealers then bid for the vehicle in a daily online auction. The highest offer wins the car, which is then collected for free by the winning dealer inside 24 hours.
Motorway says it has sold 65,000 cars since its launch in 2017 and seen sales hit £50m in May 2021 alone, £2.5m of transactions a day, and more than 4,000 completed car sales a month. With only 5% of all vehicles in the UK sold online right now, there is plenty of headroom for this market to grow.
Speaking to me over interview Leathes added: “COVID has been a real accelerator of something that was already happening. The car industry is moving online and that’s partly about people buying their next car online, but it’s also about dealers changing their behavior, how they do business, where they buy their cars. It forced that change which they resisted for a long time, and now they’re embracing it, so it’s a fundamental shift in the industry. And this is why we see such a massive opportunity to provide the rails to help both sides of the marketplace to move online.”
Rimer added: “It’s rare that you have founders who have worked together across multiple successful and less successful startups who have that scar tissue and success, and are now going for a much bigger opportunity. The business model is really an important one for us because instead of owning inventory and then having to get rid of your inventory, sort of like the difference between Nat-a-Porter and Farfetch. Motorway’s marketplace is just like Farfetch – they don’t have any inventory, which means that just by merely making that platform happen for buyers and sellers, they win. So there’s a lot less risk associated with what the money is going to be used for when building the business.”