The used-cars dealership Spotawheel has grabbed €5 million in equity and debt financing in its latest funding round. VentureFriends led the funding round along with participation from Velocity Partners and a few undisclosed strategic investors. The latest funding brings the company’s total raised investment to €8 million to date.
The company’s operating model is in line with Arizona-based used-cars retailer Carvana. The customers can visit the store directly to take the car for a test-drive or request a door-step delivery with a 7-day return policy.
All its cars come with 5 years of limited warranty. According to its CEO Arvanitis, this is the longest warranty period offered by any car dealer in Europe. Spotawheels’ proprietary ‘predictive analytics’ tool analyzes the condition and potential failures of each car.
“Used-cars is one of the largest markets in value worldwide growing at a 5-7% rate annually, operating still primarily offline in a notoriously non-transparent way,” cited Arvanitis.
The non-transparency in the operations along with hidden charges had always made the buyers hesitant towards buying used-cars.
According to the company, the lack of centralized control on the industry’s fragmented seller structure had prevented innovations coming to light over the past 20 years.
Spotawheel’s idea is to simplify the process and bring more transparency in the operations to gain customers' trust. The idea has worked so far so good for the car dealership company.
Spotawheel sources its cars from private owners and B2B resellers across Europe after examining the condition of the cars.
The B2C used-cars platform pays for the vehicles upfront, while in some cases, it operates on a commission-basis model. According to Crunchbase, the startup has an employee count in the range of 51 to 100.
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