SoftBank, a Japanese conglomerate will invest €460m in Auto1. Auto1 is a quickly-growing online car dealer in Germany. This investment will be considered one of the biggest funding deals ever for the country's resilient start-up world.
Vision Fund will be facilitating the investment, equalling a $93bn that SoftBank is investing in, but is also backed by the governments of Saudi Arabi and Abu Dhabi.
This will be SoftBank's first investment in Germany, securing the Berlin-based company's status as the most highly valued private start-up in Europe behind Spotify, a music streaming service.
This deal will leave SoftBank with 20% of the business which values Auto1 at €2.9bn, partially thanks to a funding round that happened last year where €360m was raised which gave the company it's current value. Half of the investment will be made through new shares.
“This gives us a big lever when it comes to rolling out new products and services,” said Hakan Koc, the co-chief executive and one of the founders. Christian Bertermann, the other founder and chief executive, and Hakan Koc will keep 30% of the company.
Founded in 2012, Auto1 is an online marketplace that caters to private buyers looking for used cars. It services to 30 countries and trades with more than 35,000 partners. The company sells more than 40,000 vehicles monthly.
Auto1 says its technology allows private individuals and dealers to trade across Europe through analytics and logistics technology that matches supply and demand.
Akshay Nahetam a partner at SoftBank International Advisors, will join the board of Auto1 under this deal. He said in a statement:
“Auto1 Group has built a fast-growing, data-enabled platform introducing efficiency and transparency to the fragmented used car market, which is worth more than $300bn annually.
"The investment is part of a broader bet by SoftBank on companies that hope to shape the future of transportation. Last month, it led a consortium that took a $9bn stake in Uber.
“Our platform is a piece of the puzzle that fits very well into that [strategy],” said Koc. “This is not a purely financial investment. There is a common strategy behind it.”
He continued by mentioning that there were no plans to list the company in the near future.