British used car marketplace Cinch clinches a stonking €1.16B in funding; should Cazoo be

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Constellation Automotive Group, the owner of Cinch, a UK-based B2C online used car marketplace, has raised a whopping £1B (approx €1.16B) in private capital. The digital used car marketplace will use this funding to accelerate the growth of Cinch across the UK and Europe.

According to the company, the raised capital is believed to be one of the largest ever private equity funding rounds.

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Reportedly, Cinch’s valuation may also be similar to that achieved by its competitor, Cazoo, which recently agreed to list in New York as part of a £5B (approx €5.7B) merger with a SPAC.

Investors in this round

The company raised the funds from a group of global institutional investors, including a wholly-owned subsidiary of the Abu Dhabi Investment Authority (ADIA), GIC, Neuberger Berman client funds, and funds advised by Soros Fund Management.

Speaking on this round’s investors, Thibaut Large, Partner at TDR Capital, Constellation’s majority shareholder, says, “The €400B European B2C used car market is at the beginning of a massive digital transformation – similar to the one experienced by so many other retail verticals before. Constellation is in a unique position to lead this transformation. We are delighted to welcome such a distinguished group of investors to Constellation and, together, to become the leading digital disruptor across the European used car value chain.”

Easy way to buy a car online

Launched in October 2020, Cinch is an online B2C marketplace for used cars in the UK. The company, with a customer base of 30 million visitors a year, helps its users to part exchange their car and buy or finance quality-checked used cars online as well as delivers them to their home.

Besides, the platform not only sells cars it owns but also provides a fully integrated digital marketplace to its partners such as dealers, car manufacturers, or leasing companies to reach new consumers and sell their cars directly to them online. Cinch reports that it is doing an annual sales of over 45,000 vehicles less than eight months after launch, growing at 45 per cent month-on-month on average.

The company claims to have established itself as one of the fastest-growing consumer brands in the UK and has also signed sponsorship deals with well-known sports teams and events such as the England Cricket team, Tottenham Hotspur, the Northampton Saints or the upcoming tennis Cinch Championship at Queen’s Club.

Use of the funds

Following its successful launch in the UK, Cinch aims to expand its services rapidly in countries across Europe. The raised capital from this round will help the company with resources to accelerate this expansion and continue its extensive investments in people, technology, data science, infrastructure, and brand building.

Speaking about the development, Avril Palmer-Baunack, Constellation’s Executive Chairman, says, “Constellation’s marketplaces, technology, data and infrastructure provide the backbone of the used car market across Europe. Cinch extends this presence by transforming the used-car-buying experience for consumers. This funding round demonstrates the scale of the opportunity ahead of us and allows us to turbocharge our business model and geographical reach in one of the most exciting and fastest-growing retail markets in the world.”

About Constellation Automotive Group

The company offers a digital used car marketplace that combines digital brands across the segments of C2B, B2B, and B2C. The company claims to trade over 1.5 million vehicles and £12B GMV (Gross Merchandise Value) annually across 10 European countries.

Other than Cinch, the company also owns webuyanycar.com and BCA (formerly known as British Car Auctions).

  • WeBuyAnyCar: a Consumer-to-Business (C2B) online car buying platform in the UK that provides over 16 million used car valuations a year and allows hundreds of thousands of consumers to sell their car online each year in an efficient way, with drop-off locations on average less than a 15-minute drive of UK households
  • BCA: It is a Business-to-Business (B2B) digital used car marketplace that trades over 1.5 million cars through its online and app-based auction platform each year on behalf of dealers, car manufacturers, leasing companies, banks, and other corporate customers. It claims to have been supported by the most extensive car remarketing and logistics services across Europe
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