ReachX logo

10 startups changing the auto marketplace

Publication Date: 21 Nov 2019 - By Manika Premsingh By Manika Premsingh
Actionable
Differentiated

Thematic Equity UK Automotive

The automotive sector is at the cusp of great change. And not just in terms of the technologies powering the next generation of cars but also in the way business is conducted. A plethora of companies is disrupting the automobile market place making it more efficient, cost-effective and easier. Here are 10 such UK based companies:

#1. Cazoo: The company was founded in 2018, and has raised a huge £55m from investors like Octopus Ventures, dmg ventures and Entrée capital among others, to build an e-commerce venture that provides a marketplace for used cars. Alex Chesterman, the founder and CEO, has a strong track record as the founder of the property site Zoopla and was awarded the Ernst & Young Entrepreneur of the Year in 2013. With a team that reached 100 people in nine months of being founded, the company aims to make a car available to the buyer within 48 hours of placing the order upon its launch.

#2. Carwow: Giving competition to Cazoo is Carwow, which provides both an online marketplace for new and used cars at present. A progression, after it started as an aggregator that reviewed cars to support the process of the purchase decision in 2010. It has since raised £48m from investors like Accel, Balderton Capital and Virtuvian Partners. According to the company, £5bn worth of cars have been bought through the site so far.

#3. Drover: If the companies described above are helping users buy cars online, Drover is taking the car marketplace one step forward by providing cars as a service on subscription rather than the consumer having to make a single big purchase. The company was launched in 2016 and has since raised £7.5m from a number of investors including Version One Ventures, Cherry Ventures and BP Ventures. The advantage of a subscription service compared with an outright purchase is that it allows for lesser financial commitment at a single point in time as well as making the process simpler.

#4. Wagonex: This is another provider of cars on a subscription basis, and is said to be the first of its kind in the UK. Launched in 2017, this Cardiff based company says it wanted to build a ‘Netflix for Cars’ leading to provide a service that includes all costs bar the fuel. The company recently completed a funding round, led by the Development Bank of Wales, US-based investors and UK based angel investors, of an undisclosed amount.

#5. Lease Fetcher: Providing a support-service to customers interested in comparing cars available on lease, this Glasgow based company was launched in 2018. According to Crunchbase, so far it has raised £300,000 worth of funding. Of this, £200k is from Digital Impact, a web development and marketing agency which is also the parent company. Both companies have the same managing director - Will Craig. The remaining £100k has been garnered from Scottish Enterprise, an arm of the Scottish government that promotes innovation and enterprise.

#6. Carsnip: Another support service provider, the Nottingham based car search engine, was founded in 2014 and connects car buyers to dealers, who then pay a fee to it. The company has raised a total of $1.3m to date according to Crunchbase, including through crowdfunding. According to the company, it is now on its way to raise another $5m. It estimates that there were 800,000 cars listed on the search engine at the start of last year, which is double the number for its nearest rival.

#7. Hiyacar: For consumers who are more interested in renting cars for short periods of time, Hiyacar is at hand. With a goal to be the ‘Airbnb for Cars’ the company estimates that it has had 65,000 users since it kicked off in 2016. So far, it has raised £8.5m through crowdfunding, angel investments, seed and venture funding. The company also estimates that 11 cars can be removed from the roads per car-share, making a case for environmental sustainability.

#8. Whipgo: Much like Hiyacar, Whipgo is also making it easier for customers to rent vehicles. The difference, in this case, is that the cars are sourced from small, independent rental companies. Like several other auto startups, this company is trying to make it more convenient as well efficient for customers to meet their requirements. The London based company was launched in 2016 and is presently in the process of launching the updated version to its site.

#9. Faxi: An online platform and a smartphone app, Faxi is a carpooling and lift-sharing app. Founded in 2012, the company has been funded by Nitrous, an accelerator that creates collaborations between the government and startups. More recently, Toyota Financial Services acquired a major stake in the London based company.

#10. Tractable: While all companies described so far enable customers to buy, lease, rent or pool cars with speed and efficiency, Tractable comes in where a car meets with an accident. Its technology allows damage assessment just by looking at smartphone photographs, which makes claims processing faster. It aims to work with the top 40 insurers in the world by the end of 2020. Investors have endorsed the company with it garnering a $35m investment so far over three rounds with investors like Insight Partners, Ignition Partners and Zetta Venture Partners.

Disclosure:

I have no positions in any of the securities referenced in the contribution

I do not use any non-public, material information in this contribution

To the best of my knowledge, the views expressed in this contribution comply with UK law

I agree with the terms and conditions of ReachX

This contribution is for informational purpose and does not constitute investment advice nor is it an offer to sell or buy, nor is it a recommendation for any security.

Manika Premsingh

 

Most read

ReachX
1-15 Clere Street, EC2A 4UY
London, United Kingdom
info@reachx.co
ReachX
1-15 Clere Street, EC2A 4UY
London, United Kingdom

info@reachx.co
Sign up to our newsletter