UK fintech Carmoola raises £15.5 million in a recent funding round

The UK-based fintech firm Carmoola recently secured a £15.5 million equity investment from a number of investors. The funds came from VentureFriends, QED Investors, AlleyCorp, InMotion Ventures, and u.ventures.

Carmoola emerged as an attempt to improve the used car market

Carmoola is a fintech firm that takes on traditional lenders in the £100 billion large direct-to-consumer car finance market. Previously, the company held a Series A funding round back in February 2023, during which it managed to raise £8.5 million. After that came £95 million debt facility later that same month.

The company launched its app around one year before that, in March 2022, seeking to transform the complex and overly cumbersome car finance market. Its idea was to provide an app-based, easy-to-use mechanism that would ensure fast finance approvals, which would be tailored to the specific needs of each individual user.

The company’s co-founder and acting CEO, Aidan Rushby, commented on the firm’s business model, stating that Carmoola came about because its founders could see that the used car finance market was extremely broken. However, no one bothered to do anything about it, as the status quo actually suited traditional lenders just fine. With the launch of Carmoola and its app, Rushby was a part of changing the state of things.

Now, the new capital arrived at a time when a lot of existing lenders are in a delicate situation, as they face the FCA probes into the potential mis-selling of car finance. If the probe uncovers hidden issues, this could potentially open the floodgates and lead to millions of compensation claims coming from potentially mistreated drivers.

Used car market sees a sharp rise

Rushby stated that Carmoola’s goal is to make car financing much more user-friendly, as well as hassle-free. He also added that the company’s unrelenting focus has already allowed it to support purchases of more than £46 million worth of cars.

The new funding will be a huge help in allowing the company to continue its work and support its users. Also, while the money itself is of huge help, it also represents the support of investors, which will further assist the company in helping people buy cars of their dreams.

The new funding will be immediately deployed to scale the business and help it reach and serve more car buyers. After all, the UK’s used car market has been growing on a yearly basis for a long time now, and is now close to reaching the pre-pandemic levels. With that being the case, Carmoola and its services are now needed more than ever, and its work and effort will help drive a path to profitability.