10:12 am, June 27, 2020
Carwow founder James Hind has revealed how he built his car buying website from a blog started in his bedroom to a multimillion pound multinational business.
In an exclusive video interview with Car Dealer Magazine, chief executive officer Hind explains how ‘hiring brilliant people’ has helped him build the new car lead generating business that’s aiming to one day float on the Stock Exchange.
In the revealing interview, which you can watch above, the 33-year-old also talks about:
- How he built the website to a £22m turnover
- When he thinks the business will start to make a profit
- His biggest regrets in setting up Carwow
- How used cars will become more important to the firm
- What drives him to grow the business
- How his biggest fundraising round will be with a Stock Market IPO
Last year, Carwow turned over £22m and in the last decade has raised £48m worth of funding from a variety of investors, including some early seed capital from online car dealer Cazoo founder Alex Chesterman.
Hind started the Carbuzz website in 2010 with his now wife Alexandra Margolis and their co-founding partner David Santoro and rebranded it as Carwow in 2013.
Hind says: ‘We originally started with a website where we collected all the car reviews around and summarised them to help people work out which cars to buy. We didn’t have any money, we didn’t know what we were doing, but that was 10 years ago.
‘We had a content site and we couldn’t make any money out of it. We had a decent amount of traffic, so the growth happened out of necessity really.’
Hind soon spotted a niche when he realised users wanted to ask him for advice on how to buy a car – so he published his phone number on the site and started talking to them.
‘People were coming to the website ultimately to work out which car to buy,’ said Hind.
‘I started speaking to dealers and consumers and working out how to connect them. I made my email address really prominent on the site and my telephone number, my landline number to my flat at the time, and said if you’re looking to buy a car, give me a ring.
‘I started talking to people. I connected customers to dealers. And then I started to understand how consumers think about these things and realised there was something there.’
£22m
Carwow revenue in 2019
Hind then grew the business – and it grew rapidly. But as that happened he needed cash to fund it.
To get this he started writing and cold calling angel investors who he knew had put money into similar tech start-ups. These included Chesterman, who had grown LoveFilm and Zoopla into huge tech firms.
‘We had to raise money, we had no money to invest in marketing or the website so all I did was cold email people I thought were rich,’ said Hind.
‘I went for ones who had done something vaguely similar and the vast majority ignored my emails or some physical letters but we managed to scrape together £250,000 from about 12 individuals. And it went from there.’
Since that first £250,000, Carwow has raised cash every 12-18 months as it has grown in the UK and now in Germany and Spain.
‘When these super smart people put their own money on the line to back the business it was vindication for me,’ said Hind.
‘For me, my wife and David, who also co-founded the site, it was a big endorsement for us. And we still feel the same way every time we raise money.’
Hind believes the investors bought into the business because they could see the potential to change car buying.
He added: ‘They’d all bought cars and realised it’s not really consumer friendly and their question was why has no one fixed this?
‘They believe we can do that.’
Hind believes the shift to online car sales that the lockdown has supercharged will ‘strengthen his proposition’ going forward and that his business will be well placed to take advantage of this change.
In the video interview, Hind also speaks about how it took time to win car dealers over and show them why his platform can help their businesses grow, but he admits Carwow ‘made mistakes’ along the way.
He also tells Car Dealer Magazine founder James Baggott about his battle with BMW and how they approached the CMA to allow the brand’s dealers to work with Carwow – and won.
In the UK, Hind says the business is profitable, but that is being invested in starting up overseas territories in Germany and Spain and other new business areas.
He said: ‘We’re not profitable as a business overall, like many tech businesses we raise money so we can keep investing in the business and growing it.
‘We think that is the best position we can be in considering our size and opportunity – there’s a huge amount more we can do. We have investors who believe in that.
‘We know we can raise more money so we’d rather go for growth overall.’
Hind believes Carwow has big opportunities in other markets to grow and expand further while he will also be targeting the nearly-new used car market.
This is an area Carwow has made forays into already and it will become a larger part of the website as it expands.
‘Cars with approved manufacturer warranties on them are a big opportunity for us – we’re in it, we send a lot of leads to dealers on it, but we can get a lot bigger,’ added Hind.
‘New cars are commodity, they all come from the same factory, but used cars are all slightly different, so there’s more risk there. We want to help dealers give them a digital showroom for used cars.’
You can watch the full video interview below.
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