Among the ongoing trends in retail is the funding for online used car platforms, and the ongoing rise of eCommerce and digital payments in Latin America. The latest evidence of that comes via Japan-based SoftBank.
According to Reuters, SoftBank “is in advanced talks to invest in Mexican used car platform Kavak and financial technology firm Konfio, several people familiar with the matter said, underscoring the company’s interest in Mexico as it pours money into Latin America. SoftBank is discussing an investment in Kavak, an online platform for buying and selling secondhand cars, said three people, speaking on condition of anonymity because the talks were not public.”
Used Vehicle Trends
In some ways, we are in a golden age of used car sales, mainly because of the way digital technology is not only removing friction from those transactions, but also taking away the pain long associated with buying a pre-owned vehicle (from the poor used car salesperson, often ranked lower than even lawyers, politicians and reporters on the scale of disreputable living).
Further evidence of that golden age comes from Indonesia, one of the world’s most populous countries, and a place where eCommerce and digital payments are gaining ground. A report this week said that an online used car platform in that country called BeliMobilGue has raised $10 million in fresh capital in a Series A round of funding to help expand its offerings. The company – whose name means “Buy My Car” in the country’s official language – was founded in 2017, and last year raised $3.7 million in a previous round. BeliMobilGue is a joint venture between European and Indonesian firms.
Consumers who want to sell their cars via that platform reportedly seek an online price estimate. “If the owner is happy with the valuation, BeliMobilGue takes the vehicles in and, after a one-hour check attended in person by its testers, it arranges a sale to its network of over 1,000 dealers and private buyers. The entire process is targeted at one hour and is free for consumers,” according to the report.
Used car sales are having a moment, underscoring the opportunity for digital platforms that focus on such vehicles. New car sales in the U.S. are reportedly set to decline 1.1 percent year over year in 2019, and to sink below 17 million for the first time since 2014. The reasons? “Higher interest rates and a bevy of new cars coming off lease stand to push more customers into the used market in 2019,” according to CNBC.
More specifically, “we’ll see continued increases in the late-model used vehicles. The key difference in 2019 is we’ll see a mix of those used vehicles more reflective of the shift in demand for trucks,” according to a recent interview via Wards Auto. “Obviously, the used market lags in terms of the mix [by] about three to four years. The year 2019 is when we’ll see a maturity in that used car inventory mix.”
Companies that have been striving for stronger positions in the digital market for used cars could potentially see gains, though that’s just speculation now. What’s not guesswork is that innovation has been steadily increasing in this space.
Take Online auto retailer Vroom, which recently announced a $146 million Series G funding round led by AutoNation. L Catterton, General Catalyst Partners, Fraser McCombs Capital and individual investors also participated in the round. Vroom offers thousands of low-mileage, reconditioned, used vehicles that are delivered directly to consumers.
The latest news from SoftBank confirms the growth of used cars online.