February 12, 2013 - Moscow. Graduate of GTI Labs business accelerator, a Russian online car broker service Car-Fin, has announced a $400K funding by Prostor Capital venture fund and Moscow Seed Fund.
Car-Fin is an automated online service that allows its customers to compare car offers and select a car based on the cost of ownership, as well as compare banks and leasing companies’ offers for the selected car, including dealership and insurance company selection, and make a purchase on credit online.
Car-Fin’s business model is based on effective partnership with car dealerships, banks and insurance companies, as well as integration with the existing online car portals. The users of these portals get the benefit of making time and cost-effective car purchase online, while the portals themselves receive an effective tool for monetizing on the traffic and increasing customers’ loyalty.
«Our goal is to make Car-Fin a go-to-service which simplifies the process of car selection and purchase on loan online for any category of users. By saving time, money and effort the chances that the customer will make a positive buying decision increase many-fold, which in turn will have an overall positive impact on the car sales industry», explained Car-Fin Co-Founder and Commercial Director, Grigory Petrov.
Presently on the Russian internet market there are no similar services with such a wide range of car offers. Apart from the listed options Car-Fin offers quite a unique service for the Russian market – buyback car loans, i.e. when selling a new car the dealership undertakes to buy the car back on fixed price when the loan period is due. This allows the customers to reduce loan payments. Around 60% of cars in Europe and 80% in the USA are bought through such buy-back programs.
Car-Fin launched its beta version in October 2012. In order to secure funding the startup had to achieve specific goals and milestones set within a three-month acceleration program, GTI Labs, launched by Global TechInnovations consultancy in partnership with Prostor Capital.
The startup’s potential and results achieved in the accelerator were highly assessed by the investment partners. “We really liked Car-Fin’s business-model and the team,” said Alexey Solovyev, the Managing Director at Prostor Capital. “GTI Labs business accelerator allowed us to see the development of the startup and be more flexible in terms of funding – investing at an early stage when the business model has not been validated by the reality, whereas typically we would invest at A round and later with the average funding of $1.5 million. We hope that our financial and expert support will help the team develop a valuable and useful resource.”
“GTI Labs accelerator in partnership with Prostor Capital and Moscow Seed Fund has demonstrated a successful model of collaboration between a private consultancy, a private venture fund and a state fund. Car-Fin raised more than just financing, they secured “smart money” which greatly increases the chances to secure financing at later stages when the company grows,” said Artour Baganov, CEO at Global TechInnovations.
Alexey Kostrov, the Managing Director of Moscow Seed Fund tells: “This is the first deal in 2013 and the first one with Prostor Capital. We are very positive about Car-Fin’s success.”
To date Car-Fin has secured contracts with several banks, leasing companies and dealerships, and has integrated modules with a partnering web site www.avtobizon.ru.
In 2013 the startup plans to develop the product further and start scaling to all regions of the Russian Federation, and to grow partnership base (at least six dealerships, ten banks and leasing companies, ten auto websites, and at least one insurance company). The funds raised will be allocated accordingly to meet these goals.