Carzam has raised £112m in its first external fundraising round design to help propel the online car retail business into its “next chapter”.
The Cazoo and cinch rival, founded by Big Motoring World chief executive Peter Waddell and former Cox Automotive International president John Bailey and launched a year ago, expects its first year revenues to total around £150 million on the back of 13,500 used car sales.
But Carzam chief executive Kirk O’Callaghan said that the new funding injection would truly “cement us as a true industry challenger” as he prepares to scale the business following its strong start to trading.
Waddell and Bailey have been joined by a US-registered global institutional investment management firm with more than $37 billion in assets as the lead investor in Carzam’s first external fundraising round.
And O’Callaghan said: “The appetite for investment in Carzam reflects the strength of its online car sales proposition. We continue to grow our customer and remarketing services in preparation to increase our unit numbers exponentially.
“The £112m will propel Carzam into its next chapter. The funding will support technology development, which is required to keep pace with consumer demand.
“Buyers are hungry for a hassle-free purchase at a fixed price, with excellent aftercare and a moneyback guarantee. People want to browse from home and make their own choice – they don’t want to be sold to.
“This new investment will facilitate Carzam’s bold plans and cement us as a true industry challenger, bringing quality used cars to the market faster, in better condition and in much greater volume.”
Bailey said: “This is a pivotal moment in Carzam’s history. To attract investment at this scale just months after our launch is a huge achievement and is recognition of our rapid growth.”
Waddell added: “This is testament to our team’s efforts to establish Carzam, and to the strength of our customer proposition – we offer a simple way to buy the best quality used cars at competitive prices. It’s a model that makes sense to the consumer and that works for us as a business.”
Carzam claims to be able to deliver customer vehicles to their home or workplace within 24 hours in some cases and offers a 14-day money back guarantee on purchases.
Its vehicle preparation takes place at Big Motoring World’s £14m logistics hub in Peterborough.
Since its launch last year, Carzam has assembled a management team of industry experts who bring with them a wealth of experience.
Following O’Callaghan’s arrival from Sytner Group’s expanding Carshop used car supermarket, James Buxton left Audi to become Carzam’s chief commercial officer.
Former Cox Automotive UK chief executive and chief financial officer Michael Buxton, meanwhile, was one of the first senior appointments, becoming CFO, before Ashley Wade joined from Renault as chief marketing officer.
Most recently, Carzam appointed Dave Palmer, formerly of Sytner’s Carshop, as its chief Vehicle preparation officer, in August.
O’Callaghan said: “Carzam has exceeded its launch expectations. We are now on track to becoming the fastest growing online car sales business, an ambition which has moved closer with this investment.
“The funds will move us almost immediately into our next phase. Scaling the business will strengthen our customer proposition and bring employment opportunities across a variety of disciplines.”