Carwow is an online marketplace for new car buyers. Users build the cars they want to buy and compare discounted offers direct from dealers, then buy direct.
New car buying is most people’s second biggest purchase in life and is a process that the majority of consumers dislike. Cars are the only product where you have to haggle face-to-face. There is no transparency in the market and consumers can overpay by thousands of pounds.
Who is your startup aimed at?
Smart new car buyers in the UK who want a great deal on their new car with the least bother.
Buying a car should be an enjoyable experience – travelling around different dealerships having long drawn out negotiations and not being given a price upfront is time-consuming, exhausting and frustrating.
How does your startup stand out against it’s competitors?
There’s no direct competitors to us over here, we offer a transparent service where car buyers are in control. They compare upfront offers from multiple dealers whose prices and contact details are all provided. It’s then up to them to get in touch with their favourite dealer and buy direct without feeling pressured. Users love it because they don’t get hounded, and dealerships love it because when somebody gets in touch, they’re a very well qualified lead.
The closest thing to competitors are car brokers – these guys sit in between a dealership and a customer and ‘broker’ the sale, which typically leads to it being about driving down price. It’s not transparent and there can be a fair amount of bait and switch. At carwow we recognise that price is only one part of the equation; Location of the dealers, responsiveness of dealers and reviews from previous carwow buyers are just as important.
Where did the idea for the startup come from?
I’ve always been pretty into cars, so much so that I was being badgered by friends to give them advice when they were buying a new car. Existing car review sites just weren’t helpful to them as they’re focused on petrolheads, not making it comprehensible to your average car buyer.
We launched as a review aggregator helping people choose which new car to buy based on expert reviews and ratings, but soon realised that actually buying a new car was a far bigger problem for people. So, we set out to solve that too!
Did you have any concerns when starting your business, if so what were they?
Running out of cash. We started on a tiny scale working with a handful of dealerships for just a single brand. We were driving a fair amount of our sales with paid advertising, which isn’t cheap. It was crucial that we reinvested sales revenue into more advertising, but it had to be balanced.
Even with that in mind, our review site was always doing well so we had that to fall back on. The biggest issue of any early stage startup is raising finance at the right moment, you have a window when people will be interested and it’s crucial that you hit it. We were fortunate to raise a fairly substantial seed round at the right time, which really funded our growth.
What is your business background, and what got you interested in startups?
I studied Finance Accounting & Management at the University of Nottingham and wanted to go into a career in Finance initially, but an internship at a fund management company put me off a city-based career for life. Starting up straight out of uni seemed like a great opportunity to go for it when you’re not sure exactly what you want to do and you don’t yet have any real commitments.
How did you initially raise funding for your company?
We bootstrapped for the first 18 months then used the proof of traction to raise money from angel investors. We deliberately chose angel investors who could offer more than just the money, we wanted investors who could give us advice, had a great network and who would support us.
What has been your greatest achievement so far?
Raising money from VCs was a big achievement, especially from the caliber of VCs who have backed us. It wasn’t easy, we met most of them over 12 months before they actually funded us, but we’re very proud.
Selling our first car was also a great moment!
How long has the your startup been in the making, and who is the team behind the business?
We’ve been live as carwow for about 12 months now, during which time we’ve shifted over £45m worth of cars, £10m of which was just last month.
The founding team is myself and my 2 co-founders Alexandra Margolis (Head of Design) and David Santoro (CTO). The team itself is up to 8 people now with a few new people joining us in the coming weeks.
What has been your biggest challenge so far as a startup owner?
Hiring is always a challenge. Persuading amazing people who already work for great startups to leave isn’t easy, or cheap!
In the coming year, what would you like to achieve with your business?
We’re billing a significant amount each month, and growing pretty quickly but we still have a relatively small marketshare in the UK. The primary goal is to scale that as fast as possible. Beyond that there’s other markets and geographical locations that are on the radar.
What has been your most valuable lesson so far since starting your business?
That there aren’t right answers. When we started we spent a lot of time looking for the ideal solution or trying to work out what the best approach to a problem is. In reality a lot of decisions are based on intuition, especially in the early days, and there never is a crystal clear path to what you should do.
Finally, If you could give one piece of advice to someone thinking about starting a business, what would it be?
Just start. We never would have got into creating a new car marketplace if we hadn’t started as just a content site. Your business will always evolve, but actually jumping into the deep end is the first step.
