12:29 pm, January 31, 2023
Online used car marketplace Motorway has opened its doors to Car Dealer for an exclusive Investigations video.
The fast growing online used car auction platform has made plenty of headlines since it arrived on the scene in 2017 – but where did the idea come from, and who are the people behind it?
In this special video, the founders of the used car auction platform – that connects used car sellers with car dealer buyers – have chatted about how they set up the firm and turned it into the billion dollar business it is today.
Speaking to Car Dealer, the team explains how they came up with the idea for the platform that last year generated £1.7bn worth of car sales.
In the video, which you can watch above, we also speak to a host of car dealers who use the platform about their thoughts on the disruptor.
Six years after it started, Motorway has 350 staff working from offices in central London and Brighton.
Its success story has seen it raise more than £200m in funding and it now works with 5,000 car dealers across the country.
But this isn’t the first time Motorway’s founding partners – Tom Leathes, Harry Jones and Alex Buttle – have worked together. This is the fifth tech business the trio have started in the last 15 years.
Previously they found success setting up – and then selling – various comparison websites. They dabbled in property and broadband, and then, after a short break, decided to focus their efforts on the used car market.
They believed they’d spotted a gap for consumers to get the best price for their cars by selling them quickly and easily to car dealers. And it was this kernel of an idea from which Motorway was born.
‘We wanted to build the one company which would define our careers, and something that we could build over a 20 or hopefully 30-year period,’ explains CEO Leathes in the video you can watch above.
‘We zeroed in on this problem that we’d had as consumers, which is the problem of selling a car – how do you sell your used car for a great price and have a good experience doing it?
‘We looked at that problem and thought, that’s where we need to focus. And if we can build something that changes that and makes it better for dealers, then we’ll have something brilliant on our hands. And that was the start of Motorway.’
Car dealers love the fact they can get their hands on quality used car stock direct from consumers via the platform. While currently it’s not quite set up for bulk-buying dealers, those that do use it like the fact they get access to quality cars that are often hard to find.
Redline Cars director John Graeme tells us in the video he thinks the idea for Motorway proves ‘how fast asleep the motor trade sometimes is’.
‘It was a simple thing to do and just connected the dots,’ he said.
Marc Handscomb, director of used car dealer DCC, added: ‘It is very transparent. You tend to find that when people are selling their cars personally and privately, they know they’re going to have to interact with you, so when you turn up to collect the car, they tend to be a lot more honest.’
Like WeBuyAnyCar.com, Motorway is designed to offer consumers a hassle-free way of selling when they can’t be bothered to sell their cars them privately.
Essentially it’s an online auction where dealers compete to buy the vehicles. Sellers are guided through a simple process of listing and uploading their car to the site. They fill in an online form and take their own pictures.
Experts at Motorway then check the adverts for quality before setting them live in daily auctions of up to 1,000 cars.
Helped by this simple process, as well as their memorable radio and TV adverts, Motorway has continued to grab market share from traditional auction houses.
However, like most tech firms on a fast-paced growth trajectory, profitability is something that’s seen more as a nice to have, not a necessity.
Motorway is still submitting abridged accounts to Companies House but did Car Dealer that the value of the cars it sold more than doubled in 2022 – up from £841m in 2021 to £1.7bn.
In a statement, Motorway said that it is on ‘a strong path to profitability’ and that it has ‘significant funding reserves to drive its growth’. What losses the tech firm is clocking up, were not disclosed.
Leathes said: ‘We believed from the start that this has to be a sustainable business. And even though it’s a technology business, it has to deliver a sustainable, hopefully 20 to 30 year journey.’
Motorway has hoovered up investment as part of this growth. Its last round of funding in 2021 saw it raise £189m from the likes of BMW and Index Ventures. The latter has previously backed tech firms including Slack, Roblox, Deliveroo and Etsy.
Leathes adds: ‘We believe in the power of technology to change an industry. And we also believe fundamentally, that in 2017, and even now, the car industry is not utilising technology to its fullest to its full potential. And that’s a core pillar for the business.’
It’s certainly been an impressive success story and one car dealers we chatted to in the video think will continue.
‘It’s got the potential to go global,’ explains Taslim Miah, owner of used car dealer Car Planet.
‘I think they’re sort of laser focused on the UK market now, which is probably the right thing to do, but it’s definitely a platform that can scale across different markets.’
Sales director of Motorway James Bush agrees: ‘We are still relatively small in terms of the market, but the market is enormous. The sky’s the limit.’
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