Digital used car retail company based out of Greece, Spotawheel, recently fund raised around $5.5 million.
Spotawheel, an Athens-based startup with a model similar to the US-based company Carvana, received most of its latest backing from the multimillion dollar capital fund VentureFriends — as well as support from Velocity Parters and unnamed “strategic” investors.
The investment includes both equity and debt financing, as Spotawheel’s business model entails purchasing used cars upfront to re-sell them via their online catalogue.
Charis Arvanitis, the company’s Co-Founder and CEO, said that the used car market has immense potential to expand internationally.
“Used cars is one of the largest markets in value worldwide growing at a 5-7% rate annually,” Arvanitis said. “But it is operating still primarily offline in a notoriously non-transparent way.”
Arvanitis explained that, in the world of used cars, offline buyers often fear that the vehicle they purchase will have unexpected severe mechanical issues. Added on top of this, he said, are sophisticated processes, hidden fees and a “fragmented market” — meaning that no one company exerts enough influence to move the industry in a particular direction.
Instead, the used car industry consists of several small to medium-sized companies that compete with each other and large enterprises.
“The lack of centralized control on the industry’s hugely fragmented seller structure has prevented any meaningful innovation over the past 20 years, when the typical online classified ads emerged,” Arvanitis said.
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