While more than 8 million used cars were sold in 2017 alone, the process of selling a car has gone largely unchanged. For decades, motorists have had to drive to multiple car dealers to negotiate a sale or list on websites like AutoTrader or eBay.
Seeking to minimise this hassle is Motorway, which brings the available options online: consumers enter their car’s registration number and mileage to instantly see multiple offers. They can then compare offers and read buyer reviews before choosing the best deal for them.
This unique concept – the first of its kind – has found a large following, seeing over 25,000 monthly customer sales enquiries happen across the platform.
But with growth comes the need to raise finance. Real Business spoke with Alex Buttle, Motorway’s director, to learn more about the company’s funding journey.
Tell me more about the company.
Motorway.co.uk is the first price comparison website for selling your car. It takes just a couple of minutes to enter your reg, mileage and details to get a full price comparison experience of companies that will buy your car, instantly. There’s no waiting around for people on your doorstep or guesswork about prices required. You can compare offers and sell your car in 24 hours.
Motorway was founded in 2017 by Tom Leathes, Alex Buttle and Harry Jones, an entrepreneurial team who have been working together since 2004.
What idea or experience prompted the creation of Motorway?
Personal experience drove the creation of Motorway. Selling your car for a fair price is harder than it should be and can be very time consuming, with no guarantee of a good outcome.
Typically when selling their car, consumers have to weigh up their options between selling privately, on listing sites, to dealers or to online car buyers.
Motorway allows consumers to instantly compare prices from different types of buyer who are already in-market to buy your vehicle
What was your recent funding experience like?
It was relatively stress free! We were very lucky as we were able to bootstrap the early days of the business to make sure the platform worked before taking on a small angel round and then a bigger seed round.
Motorway’s investors now include Marchmont Ventures and LocalGlobe, plus seasoned angel investors Shakil Khan and Duncan Jennings.
What will you be using the gained funds for?
We’re looking to secure future growth. The company will be building the team, improving the technology and expanding its network of car buying partners.
When did you know it was time to pursue growth?
We knew within a few weeks of launching the business as an MVP (minimum viable product), that there was tremendous appetite amongst consumers for a price comparison-style experience when selling their car.
Many car sellers are typically confused, frustrated and desperate for answers that make sense. Motorway was built to help customers make a selling decision quickly and our early online conversion rates suggested the platform would work.
What would you have done differently if you could?
We wish the product existed a few years earlier when we were all comparing options to sell our cars at the time!
What is your biggest piece of advice for companies similarly seeking additional finance?
Prove your business or product works by demonstrating high consumer engagement before getting funding. Make sure that it operates in a market that has large growth potential and have a clear roadmap for monetisation.
What goes into marketing such a company?
As it’s a very measurable business, Motorway currently spends most of its marketing budget on digital marketing. However, we do operate in a market that has large incumbents spending huge amounts on both offline and online advertising. We definitely expect to follow suit in time.
What do you believe is the biggest change the used car industry needs to make?
It will be ‘business as usual’ for a few years yet for most used car businesses, but the switchover from fossil fuel to electric cars is absolutely going to happen. It may have conceded that it’s slightly over ambitious, but the government recently pledged it wants all petrol and diesel cars to be off the road by 2040.
The used car industry will need to adapt by embracing electric car sales (whether new or used) and by being open to different models of ownership – whether that’s annual rental agreements, shared ownership contracts or subscriptions for driverless vehicles.
No one is quite sure yet what will happen as regards traditional car ownership. Will car finance as we know it exist for example, or will subscriptions take off?
No one really knows, but change is going to happen and the used car market has just 22 years to adapt or die.
Where do you hope to take the company in the future?
We are highly ambitious, but also extremely focused. We want to build the ultimate comparison website for selling your car as a part one. We will keep you posted on part two!