UK car finance fintech Carmoola has raised a £8.5m Series A round and £95m debt facility towards its car funding business proposal launched ten months ago.
The round was led by US-based fintech specialists QED Investors, with participation from existing investors VentureFriend and InMotion Ventures, the investment arm of Jaguar Land Rover.
It also includes a debt facility provided by NatWest, placing Carmoola in a market worth £120bn in the UK alone.
Carmoola said its “neo car finance” product promises to reduce the time it takes to complete a car purchase from days to minutes.
Carmoola said its in-house technology and systems “enable a streamlined process that provides buyers with a budget, generates a free history check on the car and allows payment to be made both instantly online and at the showroom within just 60 seconds using a Carmoola virtual card.”
Carmoola CEO Aidan Rushby said: “Used-car finance couldn’t be more ready for a fintech revolution. Consumers want the freedom to go shopping anywhere, knowing what they can spend, without sending off reams of forms and payslips.
“Frustrated consumers are being put in a corner with excessive rates, manipulated commission, and poor customer service, but it’s the very process of getting the finance that is at the heart of the problem. It’s full of paperwork, lengthy processes, and lack of certainty, but most importantly, car finance is obtained after the consumer has fallen in love with the car they want, which wholly puts them on the back foot. Until now, that is.”
With 7.5 million used car purchases being completed in the UK alone in 2022 – at an average price of £13,705, Carmoola is serving a £120bn market for pre-approved car finance.
Yusuf Özdalga, partner and head of Europe at QED Investors, the backer of finance unicorns Remitly and NuBank that led the round into Carmoola, said: “Having not adapted to modern expectations for the consumer, the car finance industry has been caught off guard by the new neo-car finance brand Carmoola, who champion the consumer at every part of the process.”
The plan is to deploy the funding immediately and to grow the team to 20 people to meet demand, the company said.
Pure-electric cars rose by 57% to take a 1% share of the used market, which will become a continuing trend for Carmoola to capitalise on, the company said in a statement.