11:03 am, April 12, 2022
London-based car finance disruptor Carmoola has raised £27m in seed funding from angel investors and VCs including Jaguar Land Rover’s investment fund.
The company claims it will revolutionise the car finance industry, which it’s called a ‘complete old banger’.
Carmoola gives car buyers a finance decision within 60 seconds and, similar to other car finance providers, funds a pre-approved value that can then be spent at dealerships.
However, Carmoola also generates a credit card for buyers to to spend online or in ‘thousands of reputable dealerships’ using either Apple or Google Pay.
It claims on its website that there’s ‘no waiting around’, no ‘painful paperwork’ and ‘best of all, no broker commissions’.
It adds that it saves the consumer money by ‘cutting out third parties’.
Co-founder Amy McKechnie said: ‘Although new online car marketplaces have made buying the car easier, they are still using traditional car finance lenders that remain in the dark ages and consumers are paying for this.
‘Underwriting is being done and reviewed manually on a case by case basis. Clunky off-the-shelf loan management systems are preventing companies from problem solving and automating processes, meaning there’s more manual work required in servicing loans – all of this cost is being passed onto the consumer.
‘Existing lenders are also paying 15-20 per cent of the loan amount in broker commission. And who do you think pays for that?’
Carmoola CEO Aidan Rushby added: ‘There’s an incredible fintech revolution going on. And yet, car financing seems to have been forgotten about. It’s like a complete old banger.
‘The freedom to go shopping anywhere, knowing what you can spend, without sending off reams of forms and payslips, puts the consumer immediately in control of their car purchase.’
The business has now received investment from angel investors including ex-MD of Google UK & Ireland Dan Cobley and others who have backed Revolut, Clearscore and Monzo.
The seed round also included VCs such as InMotion Ventures, Venture Friends, BCI and Clocktower Ventures.
The investment will be used to develop the product and launch in the initial stages.
