Car finance FinTech Carmoola has raised an £8.5 million Series A round and £95m debt facility to revolutionise the way people pay for car purchases.
The round was led by US-based FinTech specialist QED Investors, with participation from existing investors VentureFriends and InMotion Ventures, the investment arm of Jaguar Land Rover.
It also includes a debt facility provided by NatWest, priming Carmoola for rapid growth in a lucrative market.
Launched only 10 months ago, Carmoola says it is liberating an archaic, slow and backwards car finance market with a straightforward product which reduces the time taken to complete a car purchase from days to just minutes.
Carmoola’s technology 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 virtual card.
“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,” said CEO Aidan Rushby.
“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 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 7.5m used car purchases being completed in the UK alone in 2022 – at an average price of £13,705 – Carmoola is serving a £120 billion market for pre-approved car finance.
Yusuf Özdalga, partner and head of Europe at QED Investors, 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.
“Carmoola is on track to dominate the car finance sector with a game-changing approach to purchasing.”
The plan is to grow the team to 20 people to meet demand, with the customer at the heart of their business.
Rushby added: “This funding will not only drive our ambitious growth aspirations but enable us to continue putting the customer at the forefront of everything we do.”
Carmoola will also be launching green discounts in the coming months, which aim to incentivise consumers to utilise more sustainable choices. 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.