Car finance fintech Carmoola raises £103.5m to transform how you pay for a car

UK car finance fintech Carmoola has raised an £8.5m Series A round and £95m debt facility to revolutionize the way people pay for car purchases.

The round was led by US-based fintech specialists QED Investors, with participation from existing investors VentureFriends and InMotion Ventures, the investment arm of Jaguar Land Rover. It also includes a debt facility provided by Natwest, giving Carmoola rapid growth in a lucrative market worth £120bn in the UK alone.

Launched just ten months ago, Carmoola is liberating the archaic, slow and recurring car finance market with a new, simple ‘neo car finance’ product that is easy to use and cuts the time it takes to complete a car purchase from days to mere minutes. Carmoola’s exclusive proprietary technology and systems enable a streamlined process that provides buyers with a budget, generates a free history check on the car, and allows payment to be made both instantly online and in the showroom within just 60 seconds using a Carmoola virtual card for a seamless consumer experience.

Carmoola CEO Aidan Rushby so: “Used car finance could not be more ready for a fintech revolution. Consumers want the freedom to shop anywhere, and know what they can spend, without sending out reams of forms and payslips.

“Frustrated consumers are being cornered with inflated prices, manipulated commissions and poor customer service, but it’s the very process of obtaining finance that is at the heart of the problem. It’s full of paperwork, long processes and a lack of security, but most importantly everything, car financing is achieved after the consumer falls in love with the car they want, which puts them completely on the back foot. Until now, that is.”

With 7.5 million used car purchases completed in the UK alone in 2022 – at an average price of £13,705, Carmoola serves a £120bn market for pre-approved car finance.

Yusuf Özdalga, partner and head of Europe at QED investorsthe backer of financial unicorns Remitly and NuBank who led the round into Carmoola said: “Having failed to adapt to modern consumer expectations, the car finance industry has been caught off guard by new car finance brand Carmoola, which champions the consumer at every stage of the process. Carmoola is poised to dominate the car finance sector with a game-changing approach to procurement.”

The funding will be immediately used to continue scaling the business and support the rapid customer adoption Carmoola has seen since launching just ten months ago. The plan is to expand the team to 20 people to meet demand, with the customer at the heart of their business. This champion of customer service and experience has given Carmoola ratings of a minimum of 4.9 out of 5 across all review platforms.

Rushby added: “This funding will not only fuel our ambitious growth ambitions, but enable us to continue to put the customer at the forefront of everything we do.“

Carmoola will also launch green rebates in the coming months, which aim to motivate consumers to use more sustainable choices. Pure-electric cars rose 57% to take a 1% share of the used market, which will be a continuing trend for Carmoola to capitalize on.