Aussie online used car dealer Carma emerges from stealth with $20 million seed round - Gadgets Price - Gadgets Price
Aussie online used car dealer Carma emerges from stealth with $20 million seed round - Gadgets Price
Aussie online used car dealer Carma emerges from stealth with $20 million seed round - Gadgets Price

Australia is entering the online used car business with Carma, a startup that has just raised $20 million (AUD$28 million) seed money from Tiger Global, a US investment firm. Running unobtrusively for the past nine months, Carma says the funding has enabled the company to recruit an executive team, develop its website and set up its first inspection and reconditioning facility in Sydney.

Carma isn’t the first online car dealership with a punny name. The startup now joins Carvana and Vroom in the US, Clutch and Canada Drives in Canada, Kavak in Mexico and Cazoo in the UK. They are all coming to fruition at a time when the pandemic has led to a shortage of semiconductors, which has left automakers unable to meet rising demand for vehicles. Increasingly, consumers want a contactless, frictionless way to not only search and buy a used car, but have it delivered to their door – a service company like Carma offering in their own markets around the world.

“We believe there is a huge opportunity to disrupt the used car industry in Australia by replicating an online, full-stack model that we are seeing success in the US and globally,” said Griffin Schroeder, partner at Tiger Global .

Carma’s service will first open to customers in Sydney, but Carma plans to expand to the state of New South Wales in the coming months and to Brisbane and Melbourne next year. The startup said it would soon launch another fundraising round to support its accelerated expansion plans in 2022.

“Investments in the digital used car dealer space are very active globally, given the model’s international success,” said Carma co-founder and CEO, Lachlan MacGregor, in a statement. “Having this significant support from Tiger Global is a fantastic vote of confidence in Carma and has enabled us to act quickly to build an exceptional team, technology stack and physical infrastructure. We skipped the start-up phase and were able to scale up immediately with a proven business model.”

With this extensive seed round, Carma is preparing for the launch of its online platform. The company currently has a fleet of 300 vehicles in stock, which it purchases from private sellers, other dealers and through auctions, but will soon have more than 500, a company spokesperson said.

“Normally our cars are under five years old, with less than 100,000 km (62,137 miles) and with the latest features,” a Carma spokesperson told Gadgets Price. “After we purchase them, they undergo a thorough mechanical inspection, repair and reconditioning process in-house before being photographed in our state-of-the-art facility in Sydney. We will only sell cars that meet our high standards.”

Customers viewing cars on Carma’s platform can view 360-degree high-res images of the exterior and interior, with any flaws identified and photographed. The company says it will offer transparent pricing and customer support by phone and online. After a checkout process that can take as little as 10 minutes, customers can have a car delivered to their home and have a week to try it out. If they’re not happy, they get their money back – all standard stuff in this industry.

The Australian used car landscape is fragmented and the space for buying cars online is somewhat limited to advertisements and Facebook Marketplace. Carma has no significant competition, so it has a chance to take the market while it’s hot.

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