Carwow is a reviews and deals site for potential purchasers in the market for a new car. It presents them with offers from dealers that could save them thousands of pounds. Co-founder and chief executive James Hind tells Toni Sekinah why he did a U-turn on the road to a career in finance and what unusual beverage almost ended up in his cup holder.
James Hind never saw himself as someone who could start a business. “I always thought to start a business you had to be 40 and look like a businessman,” he says. But he shattered his own preconception and now his startup Carwow is accelerating at top speed.
While at a crossroad a few months after graduating, his friend Alexandra Margolis persuaded him to join her in starting up a venture.
“I didn’t realise just how easy it is, how low risk and how little capital you need so I just jumped into it,” he says.
Now Hind, Margolis and chief technical officer David Santoro are the driving force behind Carwow, an online platform for new car buyers that is in a class of its own. “There’s nothing close to us in what we do,” says Hind.
Carwow is a site where potential buyers can read reviews of new cars and compare offers on those motors from dealers around the country.
Users type the name of any make and model in the search box and Carwow will return a comprehensive review and a ‘wowscore’ out of 10, which gives the average review scores from different automotive publications.
“People can make an informed decision on which car to buy through reading just one source,” he says.
Carwow also shows the user three pros and three cons of the vehicle, as well as the price bracket, number of seats, fuel efficiency and a fun fact. Did you know that the Fiat Panda is Italy’s best-selling car ever? Or that the Nissan Micra is known as ‘March’ in most of Asia and South America?
Then Carwow cranks its value up a gear and shows the users how much they could save if they buy that car through one of its dealers.
Users choose the features they want their ideal car to have – Hind calls it ‘building’ a car – and once they register their email address, they can see offers from up to 800 dealers around the country for that car.
They can also see the location of the dealers and how well other Carwow users rate them. “You have that social proof,” says Hind. “Then they go forward, contact the dealer and buy directly from them.”
The handpicked dealers offer their best prices through Carwow as they know that doing so will generate higher volume of sales.
It’s free for the consumer but the dealers are charged depending on how many cars they sell through the platform.
When the business was set up in 2012 it was called Carbuzz and was just an aggregator of new car reviews.
“You have all these ‘geek speak’ car magazines that aren’t very accessible to people but people are using them to help them work out whether a car is good. We thought we’d read all that content and summarise it,” he says.
Because Hind is a bit of a petrol head, his friends would always ask his advice when they wanted to buy a new car. He admired the set up of film review aggregator Rotten Tomatoes and decided that their business would do the same for cars. Carbuzz was founded after Hind was put off working in the world of finance for good.
After completing his undergraduate degree in finance, James Hind began his career with an internship at a fund management group in the midst of the 2008 financial crisis. He stayed for three months.
“That started in September 2008 and I watched the financial world collapse. The fund management group I was in got hurt really badly because they had absolutely no control over what they were doing,” he says.
Not knowing what to do, he worked as ski guide and travelled until Margolis suggested that they work for themselves. They looked at various ideas including importing Bubble Tea, a tea-based, milky, fruity, smoothie with balls of tapioca at the bottom. “It’s this weird tapioca pearl drink. I’m very glad we didn’t go down that road,” he admits.
They set up Carbuzz and used an agency to build the website but after a year brought in Santoro as the third co-founder.
“We didn’t have any control of the website, we couldn’t make changes. So we thought, ‘Let’s scrap this, build a better site and have it all in-house’,” he says.
As the number of visitors grew they realised that there was a bigger problem for car buyers than just access to easy-to-understand information.
They realised that consumers wanted a way compare offers from different dealers on a particular vehicle without having to clock up the miles visiting all several dealerships.
They developed Carwow at Hind’s kitchen table and in mid 2013 raised £250,000 from angel investors to automate the process and hire a small team.
The hunt for the second round of funding was much more arduous than he anticipated but he managed to get a meeting with Simon Murdoch, a partner at Episode 1.
Murdoch invested and brought along a host of other angels, including Alex Chesterman, a LOVEFiLM founder, who signed a cheque without ever having met Hind.
Carwow raised £1.3m from Episode 1, Samos investments, Balderton Capital in Feb 2014 and was able to raise a further £4.6m less than a year later from the same investors because the business looked so healthy.
“We demonstrated really quick growth and we knew we could put more money to work, largely though advertising and hiring.”
The team has grown exponentially in the last 12 months. Last year they were a team of six, which has since grown five-fold to 32.
The AWS hosted-website is built in Ruby by the four-strong team of developers; Hind is very keen to increase their numbers.
“We’d take five developer today if they were great,” he says. “We’re a technology company first and foremost and developers just automate and improve anything.”
Hind says that since launching Carwow customers have bought £250m worth of new cars and saved on average £3,250 on each purchase. It looks like he’ll continue to drive a hard bargain for his customers.
*This article was first published in June 2015 on TechCityinsider.