Carwow, a platform that helps you buy a new car, has closed $39 million in Series C funding. The round was led by new investor Vitruvian Partners, with existing investors Accel Partners and Balderton Capital also participating. At todays exchange rate it brings total funding to approximately $62.6 million.
Founded in late 2010, Carwow originally launched as a car review aggregator before pivoting to become a site that claims to improve the experience of buying a new car. It allows consumers to compare offers online and buy directly from trusted dealers that are registered with the platform, specifically avoiding the arduous but otherwise necessary requirement to haggle over price and in a way that potentially introduces more transparency.
Specifically, through Carwow you can research, select and configure new cars before receiving and offers from U.K. franchised dealers. The idea is that you can then make an informed decision on those offers based on price, location, dealer ratings and delivery time, before buying directly from the dealer.
On the supply side, the startup says that more than a third of U.K. new car dealers use Carwow as a route to reaching online buyers. This has seem more than 2 billion of new cars purchased through Carwow since it re-launched in 2013, and the company claims around 5 per cent of all consumer new car purchases in the U.K. this year have been facilitated by the site. Last year, Carwow, which employs 140 people at its head office central London, expanded beyond the U.K. to enter the German market. The startup will use some of todays new funding for further international expansion.
Meanwhile, new investor Vitruvian Partners is talking up the popularity of Carwow with dealers, who, Vitruvian Partner Thomas Studd says, are drawn to Carwows highly qualified leads, noting that a third of all calls from Carwow users end in the sale of a car.
As Ive noted before, once a customer has gone through the sites funnel they not only have a much better idea of the car they want to purchase and any extras but their intent to purchase is absolutely beyond doubt. In turn, Carwow charges dealers based on the volume of cars they sell through the site. Nice business if you can get it.