AUTO1 Group, a digital used car platform, said its new Autohero brand will sell secondhand cars directly to private buyers — and inspect, refurbish and deliver the vehicles.
In March, car sales in Europe were driven down to their lowest level in at least 30 years, according to The New York Times. That came as the pandemic ravaged the world economy.
But as showrooms have reopened, demand for used cars has picked up.
Amid the pandemic, travelers are increasingly preferring their own vehicle to taking public transport, AUTO1 Co-CEO Christian Bertermann told Reuters.
“People perceive their cars as a safe place in this pandemic,” Bertermann told the news service. “The market came out strong — we aren’t yet at pre-COVID levels but we are close.”
Since its beginnings eight years ago, AUTO1 has expanded into 30 European markets and has traded more than 2 million cars.
Revenue grew by 21 percent to 3.5 billion euros in 2019, Reuters said.
AUTO1 raised the $300 million in funding in a round led by Farallon Capital Management and the Baupost Group. Existing shareholders, including Softbank Group, also took part. The investment was in the form of “convertible notes,” which could become shares of stock in the event of an initial public offering (IPO).
Reuters asked Bertermann whether this arrangement meant the company was getting closer to an IPO. “These days it’s an interesting option,” he replied.
AUTO1 Group was recently drawn into the accounting scandal involving the collapsed German payment firm Wirecard, which had been a fast-growing FinTech. Wirecard had spewed out press releases about supposed partnerships, one of which was about AUTO1 Group, which had received investment cash from SoftBank.
Some of those partnership announcements were misleading. Indeed, AUTO1 Group said that, while there were preliminary talks about a partnership, it had never progressed beyond that.
For its part, Japanese SoftBank had struck a deal for a five-year partnership with Wirecard in April 2019.