U.K.-based online car marketplace CarWow is to launch a crowdfunding campaign to support its growth plans.
The company will use equity crowdfunding platform Crowdcube, which it previously used in 2019, raising £4.9 million ($6 million U.S.) from 7,967 investors, reaching its £2 million target in less than an hour. It was in Crowdcube’s top 20 most popular campaigns of all time.
Investors will be able to get a stake in the company from as little as £10. Pre-registration is now open and the investment vehicle will go live on November 7th.
The money will be used for product development as it attempts to capitalize on the success of its C-to-B reverse auction website, where drivers sell their old cars directly to dealers when they want to change car and which has grown rapidly since launching in 2021.
“We want to crowdfund to help bring the full Carwow experience to more motorists in our current markets,” said new CEO John Veichmanis.
“Car-changing is more than just a transaction – it’s something that millions of people experience every year. One in every two people in our markets owns a car, and 20 million people change cars every single year.”
Earlier this month CarWow published its 2022 financial results which showed despite increasing revenue, its pre-tax loss more than doubled from the previous year to $36 million.
CarWow has offices in the U.K., Germany, Spain and Portugal and employs more than 370 people.
Volvo Cars has used its venture capital arm, Volvo Cars Tech Fund, to take a minority stake in CarWow and so far, the company has raised around $157 million from investors, including Accel, Balderton, Episode 1 and Vitruvian, media companies ITV and Channel and another automotive company Mercedes.