A website which allows consumers to build the new car they would like and then receive offers from dealers has secured £1.3 million of seed capital from the likes of Balderton Capital and Episode 1 Ventures.
London-based carwow has closed its maiden venture funding round with help from a consortium of investment firms and business angels.
Set up in 2013 to provide a more transparent way for people to purchase new cars, carwow’s platform has facilitated the purchase of £30 million worth of cars.
According to the business, which was set up by James Hind, its service compares offers online and then allows users to buy directory from ‘trusted dealers’ using upfront discounts.
Balderton Capital, the venture capital house behind investments in Betfair and LOVEFiLM, has led the deal alongside fellow firms Episode 1 Ventures and Samos Investments. Also contributing to the £1.3 million transaction are Zoopla Property Group founder and prolific angel investor Alex Chesterman, Simon Murdoch and Doug Munro.
A previous six-figure angel funding round was closed back when to fund the company’s move to beta, when the same individual backers contributed.
More on Balderton Capital deals:
- Wonga investor backs archify with seed with seed funding
- Livebookings gets its teeth into new £15 milliion VC round
- Atlas and Balderton back Psykosoft
Company CEO Hind comments, ‘Cars are the only product where consumers still have to haggle face to face with a salesperson and most consumers don’t enjoy the whole process.
‘By only working with dealers who offer both upfront discounts and great customer service, we’ve created an online platform where the user is in control and gets a fantastic buying experience.’
Having set up its beta platform in May 2013, carwow officially launched in February 2014 and is currently run by a team of six. Dealers looking to engage with the service are only allowed to advertise offers if the ‘best customer experience’ is provided.
Balderton Capital principal Rob Moffat, who is set to join the board at carwow, says that the VC firm was impressed by the positive feedback from users as well as dealers – which have secured a new marketing channel, generating large volumes of sales.
‘We believe carwow’s powerful online platform will revitalise the new car market which, to date, has experienced very little innovation,’ Moffat adds.
Balderton’s other 2014 deals have seen the investor back fashion e-commerce platform Lyst, payments service GoCardless and online retail business tictail. The firm has also exited its interest in DeepMind Technologies, which was bought by Google for a figure of around £400 million.