Auto1 Group, a nearly five-year-old, Berlin-based used-car marketplace, just announced a huge round — €360 million ($404 million) in debt and equity financing that includes €75 million ($84.2 million) from Princeville Global, itself a Hong Kong-based investment firm with a second office in San Francisco.
Why the excitement over Auto1? Momentum, seemingly.
The company, which values and buys used cars from individuals, dealerships, and manufacturers, then sells them for a profit to other dealerships, says it facilitated 330,000 vehicle transactions on its platform last year. It also says it reached revenue of €1.5 billion. Indeed, in a press statement released late last week, cofounder and co-CEO Christian Bertermann said the company will use its new funding to capture what it hopes will soon be 10 percent of Europe’s used sales car market.
It has plenty of competition, of of course. Among its rivals are the giant dealer groups Emil Frey and AVAG Holding, which are headquartered in Switzerland and Germany, respectively.
Plenty of used car marketplaces have also lost their thrust at some point, including Beepi, a platform founded in 2013 that was sold for parts earlier this year after raising $150 million from investors.
Beepi was mismanaged, according to TechCrunch sources, including by paying “grossly high salaries.”
Beepi, along with a spate of other used-car startups that includes Vroom, Shift, and Carvana, also features a rather different business model than Auto1. Instead of selling cars directly to consumers via the Internet, Auto1 isn’t looking to skip the dealership; it’s betting consumers want to literally kick the tires.
Auto1 also uses its own cash to buy the cars and store them until they’re sold to dealers (thus the big debt component in its fundraise). According to a 2015 Bloomberg story about the company, this speeds up the process for sellers from an average of 90 days in Europe to closer to 10 days.
Auto1 was cofounded by Bertermann — a former VP of product at Groupon — soon after he struggled to sell off two old cars that belonged to his grandmother. His cofounder is Hakan Koc, who was previously the chief product officer at the online home furnishings company Home24. They met while working in the same building.
The company’s newest round of funding, which officially closed a bit earlier this year, also includes Baillie Gifford & Co. and Target Global, and it values the company at $2.8 billion.
Earlier backers include DST Global, Piton Capital, DN Capital, and Cherry Ventures.