Old to Gold
Berlin-based startup Auto1 has quickly become the biggest used car dealer in Europe, thanks in part to foreign investors who saw the potential in the fast-growing company and the rising demand for used cars over new vehicles.
Auto1 Group operates online car trading platforms that enable individuals and dealers to buy and sell cars throughout Europe, including wirkaufendeinauto.de and autohero.com for consumers and its B2B arm auto1.com. Auto1 guarantees that it will buy every used car regardless of make, model or condition and it also takes the hassle out of selling by handling the red tape for customers, for example canceling car registrations.
Earlier this year SoftBank Investment Advisers, a division of Japanese technology giant SoftBank Group Corp., invested €460m in Auto1 through its SoftBank Vision Fund in return for a 20 percent share. The investment increased the group’s value to €2.9bn, making it the most highly-prized startup in Europe after Spotify, and will support its international expansion plans.
Established in 2012 by joint CEOs Christian Bertermann and Hakan Koç with a team of seven employees, Auto1 now boasts a workforce of more than 3,000 and operates in over 30 countries through 45,000 dealer partners.
Auto1 is experiencing strong organic growth, both in sales and the expansion of its on-site branch presence, according to Bertermann. Annual revenue last year rose 47 percent to €2.2bn, while the number of car sales reached 420,000, up from just 224 in its first year. Its success reflects the current boom in Germany’s used car market – last year twice as many used cars were sold than new cars.
The joint CEOs and co-founders of the Auto1 Group Christian Bertermann (left) and Hakan Koç at their Berlin headquarters. © AUTO1 Group GmbH
Total number of vehicles sold by Auto1 (1)
Total revenues taken by Auto1 in 2017 (1)
Total number of vehicles resold in Germany in 2017 (2)
Total value of used cars sold in Germany in 2017 (2)
(1) Source: Auto1; (2) More than double the number of new cars. Source: Handelsblatt/Federal Statistical Office
Revving up the market
In an interview with German newspaper Handelsblatt, the CEO of SoftBank Investment Advisers Rajeev Misra said Auto1 was “very well positioned” to fundamentally change the used car market. “We want to turn Auto1 into a global company,” he added. In addition to its European presence, the company is set to expand into the U.S., China, Japan and other markets.
Auto1’s proprietary technology – in particular an algorithm that determines the value and price of a car that the company is prepared to pay a private seller in seconds – is what piqued interest from the fund’s operators. “Auto1 Group has built a fast growing, data-enabled platform introducing efficiency and transparency to the fragmented used car market, which is worth more than $300bn annually,” says Akshay Naheta, a partner at SoftBank Investment Advisors, who is now on the Auto1 board.
Describing SoftBank as a strategic partner “who shares our vision of connecting the world’s supply and demand for mobility,” CEO Koç comments that the Vision Fund investment and technology expertise will support Auto1’s continued growth. Auto1 will keep its foot on the accelerator until it reaches its long-term goal of ten percent European market share.