Over the last year, a shortage of semiconductors created a drop in new cars, causing the value of secondhand cars to skyrocket. Year on year, the average asking price for second-hand autos has increased by 15.2 percent.
It’s also possible that the rise is due to people’s concerns about taking public transportation during the pandemic.
Motorway, a UK-based second-hand automobile marketplace where professional car dealers can bid in an auction for privately owned cars for sale, has capitalised on that and it has secured a $190M Series C funding round led by Index Ventures and ICONIQ Growth.
The round included existing investors Latitude, Unbound, and BMW I Ventures. The company presently has a market capitalization of more than $1B. The company had secured $67.7M in a Series B investment in June.
Motorway, which was created in 2017, runs a marketplace where auto owners may upload their vehicles and car dealers can bid in a daily auction.
Motorway Business Model
Consumers can sell their automobiles on Motorway using a smartphone app that employs computer vision to analyse the vehicle’s condition. Professional vehicle dealers then bid on the cars in a daily online auction, with the successful dealer picking up the car for free within 24 hours. Dealers and auto owners are increasingly looking to buy and sell cars online since it is a “contactless” process.
Motorway claims it already has a network of 4,000 professional vehicle dealers using the platform and that third-quarter revenues increased by 300 percent to $411M from $105M last year. Since its start, Motorway has sold over 100,000 used automobiles, with over 8,000 cars sold each month and over $2B in predicted completed sales over the next year.
Since Leathes, Harry Jones, and Alex Buttle started Motorway in 2017, the company has raised a total of $273M.
James Wilson, the former Director of Marketplace Fulfillment for Amazon UK, has been named Chief Operating Officer at Motorway, the company said in a statement.
“8,000 car sales a month is still less than one percent of UK used car sales – so there’s a big possibility ahead,” said Tom Leathes, CEO of Motorway.
“Since joining the board, following our initial investment in June, I have seen first-hand how rapidly Motorway is developing and how agile the team is in scaling the business to support this phenomenal growth,” said Danny Rimer, Partner at Index Ventures.
“The used vehicle market’s migration online is only accelerating,” said Yoonkee Sull, Partner at ICONIQ Growth. “We believe Motorway is giving the greatest customer experience and the most differentiated supply to dealers in the UK.”
While Cazoo, a British startup that operates in the same space has a different business model than Motorway. Consumers can sell their own automobiles on Motorway by using tools to assist them photograph and upload their vehicles to the site, where dealers bid on them. Cazoo, on the other hand, buys cars at auctions and from dealers.