In UK, auto start-up Hellocar folds
07 Nov 2017
Hellocar.co.uk, the British used-car sales platform with the ambition to make dealers redundant, shut down just six months after expanding U.K.-wide. In a statement, the company confirmed the news and said, “the model proved too complex to scale at this time.”
Founded in 2016 by Nic Carnell, the company had received significant attention and investment. In February 2017 it raised £1 million ($1.3 million U.S.) from JamJar Investments, and Alex Chesterman, founder, and CEO of Zoopla Property Group. And Henry Lane Fox, co-founder of Lastminute.com, joined the board as directors.
Carnell had a good track record in the online auto industry. He was the founder and CEO of The Car Buying Service, an online buying service he sold to WeBuyAnyCar.com in early 2016.
Hellocar aimed to eliminate dealers and create a simple, user-friendly digital service that allowed people to buy cars without leaving their homes.
“No spending hours in a showroom, no hard sell, no mountain of paperwork,” the website promised. “Just you, making the right choice and having it delivered to your front door.”
Its services included instant online deposits, a pre-delivery vehicle inspection, and a seven-day test drive period with a full refund. It advertised that all its vehicles came with a minimum six-month warranty, and passed multiple mechanical and background checks. Obviously delivering this level of service is expensive and time-consuming.
Not only that, it is difficult to balance supply and demand in the used-car market. As the TechCrunch report on the closure noted, “a lot of risk also has to be taken on in terms of pricing stock correctly and moving it on before it depreciates.”
The used-car business has been ripe for renovation for a long time, but that is why well-planned, well-regarded ventures still fail. If it were easy to transform the industry, someone would have done it already.
In its statement, Hellocar said that “a significant amount of money will be protected and returned” to its investors.
Cila joined AIM Group in 2014 as writer/analyst for Spain. An Anglo-American living in Ibiza, she brings extensive international writing and consulting experience to the role. Educated at University of Pennsylvania (BA) and Glasgow University (MLitt), she has worked for wide range of consumer and B2B publications and companies in Europe and the USA, writing on topics ranging from marketing to travel to music to ultra-marathoning. She uses her writing, research and analytical skills to help clients tell their stories, grow their business, reach new audiences, build loyalty and exploit new media channels. Cila is also an award-winning essayist, creative writer and founder of Creative Writing Ibiza.