Auto1 Group, a youthfull used-car marketplace serving Europe, is now worth $Two.8 billion
Auto1 Group, a almost five-year-old, Berlin-based used-car marketplace, just announced a enormous round — €360 million ($404 million) in debt and equity financing that includes €75 million ($84.Two million) from Princeville Global, itself a Hong Kong-based investment rigid with a 2nd office in San Francisco.
Why the excitement over Auto1? Momentum, seemingly.
The company, which values and buys used cars from individuals, dealerships, and manufacturers, then sells them for a profit to other dealerships, says it facilitated 330,000 vehicle transactions on its platform last year. It also says it reached revenue of €1.Five billion. Indeed, in a press statement released late last week, cofounder and co-CEO Christian Bertermann said the company will use its fresh funding to capture what it hopes will soon be ten percent of Europe’s used sales car market.
It has slew of competition, of course. Among its rivals are the giant dealer groups Emil Frey and AVAG Holding, which are headquartered in Switzerland and Germany, respectively.
Slew of used car marketplaces have also lost their thrust at some point, including Beepi, a direct-to-consumer platform founded in two thousand thirteen that was sold for parts earlier this year after raising $150 million from investors.
In fairness, Beepi was mismanaged, according to TechCrunch sources, including by paying “grossly high salaries.” Beepi, along with a spate of other used-car startups that includes Vroom, Shift, and Carvana, also featured a rather different business model than Auto1. Instead of selling cars directly to consumers via the Internet, Auto1 isn’t looking to skip the dealership; it’s betting consumers want to literally kick the tires.
Auto1 also uses its own cash to buy the cars and store them until they’re sold to dealers (thus the big debt component in its fundraise). According to a two thousand fifteen Bloomberg story about the company, this speeds up the process for sellers from an average of ninety days in Europe to closer to ten days.
Auto1 was cofounded by Bertermann — a former VP of product at Groupon — soon after he struggled to sell off two old cars that belonged to his grandmother. His cofounder is Hakan Koc, who was previously the chief product officer at the online home furnishings company Home24. They met while working in the same building.
The company’s newest round of funding, which officially closed a bit earlier this year, also includes Baillie Gifford & Co. and Target Global, and it values the company at $Two.8 billion.
Some points of comparison: 24-year-old, CarMax, which is among the largest used-car companies in the U.S., is valued at harshly $12 billion by public market shareholders, and 21-year-old AutoNation, which sells both fresh and pre-owned vehicles in the U.S., loves a public market cap of $Four billion. Europe’s largest used-car companies remain privately held.
Auto1’s earlier backers include DST Global, Piton Capital, DN Capital, and Cherry Ventures.
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