The Car Auction Platform of Tomorrow - Starting in the UK: Our Investment in Motorway

We are incredibly thrilled to announce that BMW i Ventures invests in the £48m Series B round of UK used car marketplace Motorway alongside Index Ventures, Unbound, Latitude and Marchmont Ventures to support the company’s efforts as they accelerate further growth and offer their innovative vehicle selling platform to even more customers and dealers. Motorway has built an unparalleled, digital auction platform for used car sales in the UK that offers retail consumers an instant, high valuation for their car combined with a quick sale turnaround and simultaneously provides dealers with a convenient, low-cost high quality stock acquisition channel. Motorway is unique, because it is the first company to bring the asset-light auction model to consumers and dealers at scale.

Although there are a number of different ways to sell a used car (online and offline), the process is still complicated and inconvenient for most consumers. Each of the existing selling options has benefits and drawbacks forcing the customer to make compromises in terms of value potential, ease/speed of sale or overall transparency. Motorway enables consumers to sell their car without having to make any of these compromises –  free of any costs for the seller, with instant payment and all entirely remotely.

While the car selling experience with the currently available selling options is inconvenient for the consumer, at the same time, car dealers – the buyer side – struggle to acquire stock efficiently. With all the middlemen involved - i.e. instant buyer, car auction, trade-in, classified ads - the current way of transacting used cars between sellers and dealers involves hassle and intransparency that can be avoided.

Moreover, the pandemic has significantly accelerated the move of the automotive industry towards online sales. Before the pandemic, 36% of 2020 UK car buyers were open to buying online. Now, 64% are. Motorway facilitates this transition by offering a sale process that is fast, automated and designed to create minimum hassle and maximum efficiency for both sellers and buyers.  

The seller simply needs to enter the registration number and mileage to receive an instant (expected) price. After submitting all photos and details about their vehicle through a guided web-app process on their phone, the car then gets listed into a daily auction with 3,000 verified dealers participating on the demand side. After the seller has accepted the final price, the car gets picked up from the seller’s home and the customer receives an instant payment.

Motorway’s value proposition consists of getting a better deal for both the seller and dealer by removing the middlemen and moving the whole process online. In addition, from a seller point of view, it also provides:

1. Quicker transaction (possible within 1 day) compared to up to weeks or months with classifieds or trade-in
2. Better experience - there is no need to negotiate the price or drive the car somewhere and unlike classifieds, there is no need to meet and negotiate with buyers

For dealers it enables:

1. Rapid access to curated private stock, unlike through classifieds
2. Low transaction fees compared to traditional car auctions, enabled by the fully digital model of Motorway

The company is operating in an asset-light model, not owning the vehicles but instead charging a transaction fee from the buyer, which is very capital efficient compared to owning the cars. Such a hybrid between digital stock procurement from consumers and auction sales to dealers is unparalleled in Europe. With Motorway, the founding team – who has built an impressive track record of creating multiple successful online businesses together – has hit a strong product-market fit in the multi-billion market for used car sales.

The company has completed over 65,000 successful car sales since it started in 2017. It currently sees a car sale agreed on its website every ten minutes, is completing over £2.5m of transactions a day and more than 4,000 completed car sales a month. With £50m sales in May 2021 alone, the company is projecting to hit over £650m in car sales in 2021, more than triple its performance in 2020.

We believe that Motorway is leading the start of a new era in used car retail in which the car-selling process is simpler, faster and hassle-free. This investment reflects our commitment to support purpose-driven entrepreneurs who are delivering more value through technology. We are extremely excited to join Tom Leathes, Harry Jones and Alex Buttle in their mission to build a better car market inspired by truth, transparency and fairness for everyone!

PS: Special thanks to our intern Imal Moradi for the help with the diligence.