Motorway achieves $1bn-valued ‘unicorn’ status after latest funding round

Motorway has set its sights on “further massive opportunity” in the automotive retail sector after achieving ‘unicorn’ status with a $1 billion (£750m) valuation.

The online car marketplace, first profiled by AM after it was formed as a tech start-up with just three employees, achieved its landmark valuation following its latest funding round and now plans to improve its customer experience with growth of its workforce from 250 to over 350 over the next 12 months.

Co-led by Index Ventures and ICONIQ Growth, with existing investors Latitude, Unbound and BMW i Ventures, the action boosted Motorway’s funding by a further £142 million, following a £48m cash injection in June – taking its total funding to £204.6m to date.

It comes as Motorway announced the delivery of 300% year-on-year growth, which it said placed it on a run-rate to deliver more than $2bn in sales over the next 12 months.

Motorway chief executive, Tom Leathes, said: “In 2017, we set out to reinvent how people sell their cars, transforming a broken offline process by introducing a superior online experience.

“Our team has dedicated themselves to this mission through unprecedented times - enabling us to turn a traditionally lose-lose market into a win-win for our customers and dealer partners.

“We’re now completing over 8,000 car sales a month. That’s a big number, but still less than one percent of UK used car sales - so there’s massive opportunity ahead.

“We’re thrilled to be working with the teams at Index, ICONIQ and the other investors in this new funding round. It will help us scale even faster, as we strive to build the best technology team in Europe, and change the used car selling experience for the better.”

Amazon appointment

This week Motorway also announced the appointment of James Wilson, former director of marketplace fulfilment at Amazon UK, as its chief operating officer.

Motorway said Wilson brings significant experience in online commerce for both consumers and businesses, delivering world-class customer experiences at scale.

His appointment follows that of Lloyd Page – formerly of Moneysupermarket and John Lewis – as chief marketing officer earlier this year.

Motorway enables customers to sell their car for the best price from the comfort of home using only a smartphone.

It claims to serve a network of more than 4,000 professional car dealers using the platform to directly bid on these vehicles.

Its 300% uplift in third-quarter sales to $411m (£308m) compared with $105m (£78.7m) last year. Over 100,000 used cars have been sold on Motorway since launch, it said, with over 8,000 cars currently being sold a month and a new sale being agreed every five minutes.

'Agile and growing'

Commenting on Motorway’s latest funding round, Danny Rimer, Partner at Index Ventures, said: “Since joining the board, following our initial investment in June, I have experienced first-hand just how fast Motorway is growing and how agile the team is in scaling the business to support this incredible growth. 

“Strong leadership, coupled with great technology to fuel an incredibly powerful platform, has enabled Motorway to step up a gear and move into the fast lane - they’ve taken advantage of the strong market conditions and changing consumer and dealer behaviour to become the go-to place for people selling their car.”

Yoonkee Sull, Partner at ICONIQ Growth, said: “The used car market’s move online is only accelerating, and we believe Motorway is delivering the best consumer experience and the most differentiated supply to dealers in the UK. We believe that while Motorway has already exhibited exceptional growth, the company is just at the beginning of its journey.

“We are thrilled to support the entire Motorway team in their mission to become the most trusted brand and destination for used car transactions for years to come.”