Image credits: carmoola
Carmoola, a London-based online motor financing platform, announced that it has closed £27M (approx €32.3M) in a Seed round of funding from Jaguar Land Rover’s investment fund, InMotion Ventures, VentureFriends, BCI, and Clocktower Ventures.
The investment round also included a host of high-profile angels, such as Revolut, Marshmallow, Clearscore, and Monzo, and the former MD of Google (UK and Ireland), Dan Cobley.
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Carmoola says it will use the funds to develop its product and launch the initial stages of the business.
Carmoola: What you need to know
Founded by Aidan Rushby, Amy McKechnie, Roman Sumnikov, and Igor Gordiichuk, Carmoola gives users an immediate pre-approved budget and virtual card for instant purchasing at places like Cazoo or a car dealership.
The financing platform cuts out the middleman, saving buyers money with better financial value and discounts for choosing green cars.
How was Carmoola born?
During the late summer of 2020, Aidan Rushby went for an extended break in Mallorca. With the pandemic in full swing, he decided to drive from the UK and catch the ferry from mainland Spain to the Balearic island. However, what should have been a simple process of financing a second-hand car turned out to be an unwieldy consumer experience.
“Like many people, I went into it without a clear idea of how much I should spend or could afford,” says Rushby, who is also Carmoola’s CEO.
“You find ‘the one’ and then have to go through this confusing, paperwork-laden, and painfully slow process of seeing if you’ll actually be approved for it,” he says
He continues, “The process is broken. Rather than an afterthought, your budget should be the first thing on your list. 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.”
Carmoola says the users will be given a virtual card. Once they have found the car, they can pay instantly, either online or at any car dealership with Apple/Google Pay.
“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.” continues co-founder Amy McKechnie.
She says, “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% of the loan amount in broker commission. And who do you think pays for that?”
Replacing the time-consuming paperwork, Carmoola calculates an affordable and approved credit limit in just sixty seconds, using thousands of data points.
The platform also offers additional consumer benefits such as flexible in-app financing, where users can increase, pause or make one-off payments without incurring any penalties or charges.
To become an ambitious financial super app for cars, Carmoola intends to offer insurance as well as a way to spread the cost of tyres, maintenance and servicing.
Alex Smout, Principal at InMotion Ventures, says, “Up to now car finance has been clunky and intimidating, leaving many feeling frustrated and trapped. Carmoola has reinvented how people pay for cars, focusing on transparency and flexibility to give consumers confidence in the process and access to a greater range of vehicles. We look forward to supporting Aidan and his team as they grow their game-changing approach to purchasing.”
Apostolos Apostolakis, Partner at Venture Friends, adds, “Consumer fintech has been driven by improved user experience, but the process for applying for used car finance is opaque and frustrating. Carmoola has transformed the process into a user-centric app that we’re confident will become consumer’s preferred option to finance their next car.”
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