Motorway is a British startup that allows professional car dealers to participate in an auction of private cars for sale. The startup saw rapid success removing a lot of friction in the process. He has now raised £ 48million / $ 67.7million in a Series B round led by Index Ventures, with new investors BMW i Ventures and Unbound. Existing investors Latitude and Marchmont Ventures also participated. The funding will be used to expand its platform and grow the current team of 160 people.
The startup allows consumers to sell their cars for up to £ 1,000, by uploading their contact details via a smartphone. Over 3,000 professional auto dealers then bid for the vehicle in a daily online auction. The highest bid wins the car, which is then picked up free of charge by the winning dealership within 24 hours.
Motorway claims to have sold 65,000 cars since its launch in 2017 and have seen sales reach £ 50million in May 2021 alone, £ 2.5million in transactions per day and over 4,000 car sales made per month. With only 5% of all vehicles sold online in the UK at the moment, there is a lot of leeway for this market to grow.
Tom Leathes, CEO of Motorway, said: “For half a century, inefficient offline processes have led to bad business and a bad experience for both sales people and car dealers. The freeway has fundamentally changed a broken experience where everyone ends up unsatisfied – and we’ve transformed it with a superior online experience where everyone wins. By eliminating the middleman, the consumer and the car dealership benefit from a better offer, all from home and without stress. Our incredible growth so far is a testament to our drive to deliver more value through technology – and this investment will provide us with the fuel to take Motorway to the next level.
Danny Rimer, Partner at Index Ventures, said, “We are always looking to invest in companies that are truly disrupting an industry and serving a real customer need. We found this in the highway. The team has built an incredibly powerful platform, underpinned by cutting-edge technology and a deep understanding of the challenges consumers and auto dealers face. The motorway has quickly become the first port of call for tens of thousands of people selling their cars.
Motorway has previously raised £ 14million in venture capital since it was founded by Tom Leathes, Harry Jones and Alex Buttle in 2017.
Speaking to me during the interview, Leathes added: “COVID has been a real accelerator of something that is already happening. The auto industry is changing online and part of that has to do with the people who buy their next car online, but also the fact that dealerships are changing their behavior, the way they do business, where they buy their cars. It forced that change that they resisted for a long time, and now they’re embracing it, so it’s a fundamental change in the industry. And that’s why we see such a huge opportunity to provide the rails to help both sides of the market move online. “
Rimer added, “It’s rare that you have founders who have worked together in several successful and less successful startups that have that scar tissue and that success, and who are now looking for 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, kind of like the difference between Nat-a-Porter and Farfetch. The Freeway Marketplace is like Farfetch – they don’t have inventory, which means that by just creating this platform for buyers and sellers, they are earning. So there is much less risk associated with using the money when starting the business.