A car comparison site that tries to find you the best price on a new vehicle from a range of dealers has raised £12.5 million ($18 million).
Carwow, a British start-up founded in 2013, lets users put details into their site about the exact car that they want to buy. The request is sent out to all the dealers on the platform, and the user receives up to five offers from the best-rated dealers. A buyer can then contact the dealer directly.
Accel – a venture capital firm which has invested in the likes of Spotify and Dropbox – led the funding round. Previous investors Balderton Capital, Samos Investments and Episode 1 Ventures, all participated in the round.
Previously Carwow raised £4.6 million in December 2014.
James Hind, chief executive and co-founder of the start-up, told CNBC the money would be used on advertising, training dealers to use the platform and growing the sales team. The company currently employs around 55 people, a figure that is set to grow to between 90 and 100, Hind said.
"A lot of the funding is to grow existing platform. Consumer awareness is our biggest challenge. We have to reach consumers and change their default behavior. We have to make people aware there is a better way than haggling in a dealership," Hind told CNBC by phone.
The co-founder said that the car buying process is currently "painful" with people having to bargain in a local dealership and not knowing if they are getting a good deal or not.
"A car is the ultimate consumer product yet the buying process hasn't changed for 100 years," Hind said.
Dealers who sign up to the platform are given analytics about where they are losing out on deals in order to improve their sales.
'New markets'
Carwow currently only operates in the U.K. and while Hind said that the firm is looking into other markets, he doesn't expect international expansion this year. Still, "there is a huge amount" to do in the U.K., according to Hind. New car registrations in Britain beat 2.6 million units for the first time ever, sealing four consecutive years of growth, according to the Society of Motor Manufacturers and Traders.
The platform also currently only offers users brand new cars, but Hind said that it is also looking into other areas such as second-hand vehicles.
"Part of the funding is exploring those new markets. Second hand is something we are looking at closely. We know consumers buy nearly new cars rather than brand new and all dealers sell them," Hind told CNBC.
