Online used car marketplace Motorway has raised £48m in a second round of venture capital investment, it announced today (Jun 14).
It’s being led by Index Ventures – which backs Deliveroo, Etsy and Dropbox – plus new investors BMW i Ventures and Unbound. Index Ventures partner Danny Rimer will now join Motorway’s board as well.
Motorway said the investment will mean dealers can reach an even bigger audience of people looking to sell their car so will get more quality private stock directly.
It will be using the money to improve the online purchasing experience by increasing its product and engineering teams, with the number of employees rising from 160 to 200 by the end of 2021.
It will also be investing in consumer marketing to drive even greater stock volume.
Motorway previously raised £14m in venture funding after being founded by Tom Leathes, Harry Jones and Alex Buttle in 2017.
Leathes, who is the chief executive, said: ‘Motorway was created to fix an inefficient system resulting in bad deals for both car sellers and dealers.
‘The auto trade industry needed to move online, and in just four years we have helped to make this possible.
‘We’ve transformed the car-buying process for dealers, providing instant access to the best privately owned used cars at the right price, through a convenient and 100 per cent online experience.
‘Our incredible growth so far is testament to our team’s focus on delivering more value through technology – and this investment will provide us with the fuel to take Motorway to the next level.’
Rimer added: ‘We’re always looking to invest in companies that are truly disrupting an industry and meeting a real customer need. We have found that in Motorway.
‘The team has built an incredibly powerful platform, underpinned by great technology and a deep understanding of the challenges both consumers and car dealers face.
‘As more people continue to embrace online services, our investment will help Motorway continue to grow to become the first port of call for anyone selling their car and for dealers acquiring stock.’
Since it was established, Motorway, which connects sellers directly with dealers looking to acquire stock and who bid in daily online auctions, has completed more than 65,000 car sales through its website.
More than £50m in sales were racked up in May 2021 alone.
A sale is agreed on the Motorway platform every 10 minutes, it says, with the company completing more than £2.5m of transactions a day and more than 4,000 completed car sales a month.
It’s now projecting more than £650m in sales in 2021 – over triple its performance in 2020.
Motorway estimates that by the end of last year, five per cent of all vehicles were sold online – up from one per cent at the start of 2020 – and believes this will reach 20 per cent by 2026.
It said that on average, used car prices on its platform had risen by 8.2 per cent in May versus November 2020, adding that with constraints on new car supply expected to carry on, the used car market will continue to boom.