Founded only a year ago, CarPrice is already one of the top five used car sellers in Russia
Did you know that the classic John Ford film The Grapes of Wrath was banned in 1940 by Joseph Stalin? The reason: he didn't like that it showed that even the poorest Americans could afford to own a car. That is both kind of hilarious, and also a little depressing:
Obviously all of that was a very long time ago and a lot has changed since then. The novelty of owning a car has dispitated somewhat in the last 75 years. Also, the United States and Russia are also no longer enemies.
Most importantly, Russians are able to afford their own car as well. And that has created a backlog of second-hand cars that are looking for owners, with a vast majority of deals being done on the black market
CarPrice wants to be the company that brings the process of buying used cars in Russia online. The company, which says that it is the first to develop a C2B business model in second-hand car distribution in Russia, announced on Thursday that it has closed $40 million in Series B funding.
The round was led by Baring Vostok Private Equity Fund V, with additional participation from Almaz Capital and other investors. CarPrice has previously raised a $2 millionround from Almaz Capital, e.ventures Fastlane Ventures and Oscar Hartmann.
Founded only a year ago, CarPrice has already became one of the top five Russian used car sellers, and it says that it is now the country's largest broker and online auctioneer for second-hand cars.
CarPrice provides car buyers with free online valuation in a matter of seconds. Dealers determine the best competitive price during an average 30 minute online bidding process to complete the auction. When the offered price is accepted by sellers, they collect the amount due to them in CarPrice outlets.
"CarPrice gives Russian customers the easiest and the fastest way to sell their cars, since you only need 30 minutes to sell your car on Carprice," Eduard Gurinovich, CEO of CarPrice told me. "Also, the company gives professionals shoppers the biggest market to find cars which the need exactly right now."
The company will use the funding to fuel expansion across Russia.
"We are interested in markets which have the same problem as Russia. We have a black market that makes up 90% of consumer to consumer sales," he told me, noting that the typical customer is between the ages of 25 to 50 years old, and is looking for their second, third or fourth car.
The company saves them both time, as much as weeks and months it would take to buy a car otherwise, and money, as CarPrice is able to sell its vehicles are 20% lower than market price.
"We want to be make the market transparant and be a real prices indicator on the market," said Gurinovich. "We are the only one profitable way to sell the car for women in Russia, because they don't need to negotiate with professional sellers on the market, which is not safe in Russia."
The company currently operates from more than 20 locations including Moscow, St. Petersburg and the regions, with more than 1,000 dealers on the platform. It is currently seeing 4,000 total monthly auctions, a number it wants to more than double to 10,000 by the end of 2015.