Carmoola, a UK fintech that specialises in direct-to-consumer car finance, has announced a £15.5 million equity investment. The investment follows an £8.5 million Series A round and a £95 million debt facility, which were secured in February 2023. The latest investment came from US-based fintech specialists QED Investors (backers of Klarna, ClearScore, Nubank and more); VentureFriends; Jaguar Land Rover’s investment arm, InMotion Ventures (the investment arm of Jaguar Land Rover, which also backed UK-based car repairs BNPL payment platform, Bumper); New York-based investors AlleyCorp; and Kyiv-based u.ventures.
The investment reflects growing confidence in the UK used-car market and Carmoola’s innovative approach to helping people buy their dream car. TFN asked Carmoola’s CEO and co-founder Aidan Rushby about the company and the difference it is making.
A dynamic team dedicated to the customer
Founded in 2021 by Aidan Rushby (founder of home rental app Movebubble), Amy McKechnie (Director of Product and Marketing), and Ukrainian co-founders, Roman Sumnikov and Igor Gordiichuk — Carmoola launched its app in March 2022, aiming to transform the car finance market.
Rushby, along with co-founders, and co-CTOs, Igor Gordiichuk and Roman Sumnikov, used their experience to develop Carmoola’s proprietary technology with a team of engineers and specialists in Ukraine and Poland. Rushby points to that diversity as one of Carmoola’s strengths. “We prioritise diversity of thought and experience and are focused on building a small but mighty team of world-class talent,” Rushby says. “We have team members from various backgrounds – finance, technology, analytics, marketing – all working together to create a customer-first and inclusive car finance experience for everyone.”
And the formula seems to work. Since its launch, Carmoola has enabled the purchase of over £46 million worth of cars. And it’s delighted customers too, it currently boasts a 4.9/5 rating from over 1,000 TrustPilot reviews.
Rushby aims to rebalance car finance in favour of the buyers. “The traditional car finance market is riddled with issues that make it difficult and frustrating for buyers,” he told us. Some of the issues he highlighted include opaque pricing, with lenders fee structures and hidden costs making comparisons difficult, and the lack of control and flexibility in repayments.
Rushby is also keen to make driving more accessible. For many, a car is an essential, but they find themselves locked out of ownership. “People with certain credit scores or employment situations can struggle to get approved for car finance, even if they can afford the repayments,” he told us. “It’s often a classic case of ‘computer says no’.”
Putting the car buyer in control
Carmoola transforms the buying experience by offering more control to the buyer. “We’re changing the game by offering a transparent, accessible, and user-friendly alternative,” says Rushby.
Users can do everything through the app, setting a budget and arranging a loan at the start of the process, putting them in a stronger position as a buyer. “Apply through our app in minutes, and access your funds seamlessly,” Rushby said. You can even use Apple Pay to complete the purchase.
And the ease of use continues afterwards, making it easy for customers to manager their loan, Rushby told us. “Choose your loan term, make additional payments without penalty, and make adjustments to your payment schedule — all in the app.”
Yusuf Özdalga, head of Europe and partners at QED Investors, highlighted the fresh approach Carmoola are brining. “Carmoola is shaking up an industry that had grown and remains complacent,” he said. “Addressing the poor customer outcomes and unnecessary hurdles that the incumbents have allowed to take hold.”
Transforming the customer experience, and the car finance market
Carmoola will be using the funding to empower even more people to buy a car. The used-car finance market has almost returned to pre-pandemic levels, at £100 billion, and is forecast to grow a further 90%, to £190 billion, by 2027.
Rushby hopes that Carmoola will have a transformative effect on the industry, “by making car finance accessible, transparent, and convenient, we believe we can contribute to a fairer and more fulfilling car-buying experience for everyone.” With Carmoola leading the way, he expects others to follow suit, offering more transparent, low-cost deals, based in responsible lending that focuses on affordability and financial well-being.
For many, car finance can be a dull essential, but Rushby wants it to be more than that. “We envision a future where car finance is a breeze, not a burden,” he says. “We want to bring ‘wow’ to an industry that is all often ‘meh’.”
Ultimately, whatever the reason people want a car, Rushby sees Carmoola are more than just a loan-provider. “We want Carmoola to be more than a car finance company,” he said. “We want to be a trusted partner in people’s car ownership journey, helping them achieve their mobility goals with confidence and peace of mind.”
