Auto1 gains €460m financial infusion from Japan’s Softbank
The German used-car dealing platform says the deal eases pressure for an initial public offering
Berlin — German used-car dealing platform Auto1 said a €460m financial infusion from Japan’s Softbank meant it was under no pressure to launch an initial public offering to fund its pan-European growth plans.
Softbank, through its Vision Fund, will make about half of its investment via new shares, valuing Auto1 at €2.9bn and supporting the car trader’s international expansion.
That money is of the order that Berlin-based Auto1 might have raised with a stock-market flotation, co-founder Hakan Koc said on Monday. "That’s why we aren’t considering going to the market for now," he said.
The Financial Times earlier reported the investment by the Softbank Vision Fund, which was set up by Japan’s Masayoshi Son and has raised more than $90bn, chiefly from the sovereign wealth funds of Saudi Arabia and Abu Dhabi.
Auto1, founded in 2012, buys cars using its vehicle pricing database to calculate an offer within minutes.
It then sells the vehicles on to one of its about 35,000 dealerships for a commission.
Auto1 is virtually unknown to consumers except through its used-car buying arm Wir Kaufen dein Auto (We Buy Your Car) in Germany and through similar names elsewhere.
It operates from Finland and Romania to Portugal, 30 countries in all, but not Britain.
The company was set up in Berlin by entrepreneur Christian Bertermann after having trouble selling two old cars owned by his grandmother, along with Koc, who previously worked at Rocket Internet-backed firms Zalando and Home24.
Competitors include vehicle distributors Emil Frey of Switzerland, Avag Holding of Germany and US-based used-car retailing behemoths Carmax and Mannheim, which is a unit of Cox Enterprises.
Vroom, which applies a strategy similar to Auto1 to the US used-car market, has taken in $329m in funding from T Rowe Price, General Catalyst and Allen & Co since its founding in 2013, according to venture funding database Crunchbase.
Auto1 said it now sold more than 40,000 cars per month. The company achieved revenues of €1.5bn in 2016.
Following its investment, Softbank will own 20% of Auto1 while its founders will retain just more than 30%, ensuring that together they have majority control. With the new funding, Auto1 has raised more than $1bn in outside financing, according to Crunchbase.
Akshay Naheta, a partner at Softbank Investment Advisers, will become a member of the supervisory board.