London-based auto financing company Carmoola has raised £8.5 million ($10.2 million U.S.) in a Series A funding round, alongside a £95 million ($115 million U.S.) debt facility to scale its business and invest in staff.

The funding round was led by QED Investors and featured previous investors VentureFriends and Jaguar Land Rover’s investment division InMotion Ventures. The debt financing was from Natwest and BCI, according to a statement from Carmoola. The funding will be used to increase its headcount to 20.

Carmoola’s platform lets consumers find out how much they can borrow to buy a new vehicle. Customers have the option to make one-off payments, delay payments or increase the amount and/or frequency pf payments for their vehicle financing.

Its technology platform provides consumers with a streamlined process that gives buyers a budget, historical checks on the vehicle and a way to pay instantly online or within a minute at a showroom using a virtual card. It wants to reduce the time taken to finance a car from days to minutes.

It says 7.5 million car purchases were made in the U.K. in 2022, at an average price of £13,705 ($16,564 U.S.), which means its product is serving a market worth £120 billion market for pre-approved car finance.

“Frustrated consumers are being put in a corner with excessive rates, manipulated commission, and poor customer service, but it’s the very process of getting finance that is at the heart of the problem,” said Aidan Rushby (LinkedIn profile), CEO, Carmoola.

“Used car finance couldn’t be more ready for a fintech revolution. Consumers want the freedom to go shopping anywhere, knowing what they can spend, without sending off reams of forms and payslips.”

Alongside Rushby, Carmoola was co-founded by Amy McKechnie (LinkedIn profile) who is now director of product and Ukrainian co-founders Roman Sumnikov, who is CTO, and Igor Gordiichuk, CIO.

“Having not adapted to modern expectations for the consumer, the car finance industry has been caught off guard by the new neo-car finance brand Carmoola, who champion the consumer at every part of the process,” said Yusuf Özdalga, partner at QED Investors.

Carmoola previously raised £27 million ($35.1 million U.S.) in seed funding, which was used to develop its product and launch the business in April 2022.

 

 

 

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