InstaCarro: First-year revenue $32 million US
21 Mar 2017
The figure is close to what Santander Bank, and CarSales-owned autos site WebMotors, the country’s No. 1 cars vertical, makes in Brazil.
Although InstaCarro.com’s business model is sales rather than listing-driven, it has the potential to compete with the local auto classified sites, including WebMotors and ICarros, which is 100 percent owned by Itau Bank.
InstaCarro.com promises to sell any used auto in about an hour and half, to any of more than 1,500 dealers, who can buy it through an online auction. A private car owner informs the site what is the make, model, year and version of the auto he wants to sell, and within a few seconds he receives a quote. Then, the user can schedule an on-site inspection, which takes about 30 minutes, and once it is approved, the auto is ready to be sold in less than an hour. The seller gets all the money in cash.
Despite not being targeted at the private user looking to buy a car, it could be a challenging marketplace for existing horizontals and verticals.
Mexican auto site Kavak has a similar business model. It claims it will revolutionize buying and selling used cars online in Mexico.
For used-vehicle buyers, Kavak handles all paperwork and inspections, and promises to deliver the vehicle at the buyer’s home. It also offers insurance, financing, a seven-day money-back guarantee, and a three-month guarantee. For sellers, Kavak promises to make an offer within a minute, while handling inspections, and guarantees a sale within 30 days. If a sale isn’t completed, Kavak then pays the seller the amount it initially offered for the car.
While all those marketplaces are relatively new in Latin America, some of them have proved their potential. InstaCarros recently raised BRL 33 million ($10.7 million U.S.) in series A funding from FJLabs, Lumia Capital, Hummingbird, Global Founders Capital, among other investors. FJLabs is run by OLX founder Fabrice Grinda.