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Fast-growing online used car marketplace Carma has closed a $30 million convertible note led by Regal Funds Management and existing backer Tiger Global, as the Sydney-based company experiences its strongest demand to date with 5,000 customers served since founding in 2021.
The funding will go towards expanding Carma's vehicle inventory, enhancing its range and selection, and accelerating the growth of its ‘Sell-to’ Carma offering that is powered by AI-backed pricing for competitive, accurate offers and quick turnaround times.
Carma also plans to use the proceeds to expand its production facilities, where a team of over 50 in-house experts oversee a meticulous multi-stage inspection and reconditioning process to ensure "exceptional quality standards".
The raise also included participation from existing investors such as General Catalyst and Five V, and follows a $75 million Series A in 2022 and a $28 million seed raise the year prior, the country's largest-ever seed round at the time.
"This latest raise is a huge endorsement of Carma’s vision to transform the used car industry in Australia," says Carma co-founder and CEO Lachlan MacGregor.
"For too long, buying a used car has been frustrating and uncertain. We’ve changed that by combining technology, data, and a customer-first approach to deliver a seamless, transparent, and quality online car-buying experience.
"This investment enables us to scale even faster, expanding our inventory, enhancing our digital destination, and setting a new benchmark for trust and convenience in the industry."
Carma's offering includes integrated financing, free home delivery or pick up, and a 7-day return policy. From its savings operating without physical dealerships, Carma reinvests in vehicle quality and customer service, which it claims redefines trust and transparency in the pre-owned car market.
"Australia’s pre-owned car market is ripe for disruption, and we’re excited to back Carma to meet the increasing demand for a better car-buying experience," says Regal portfolio manager Jessica Farr-Jones.
"With a seamless online platform, top-tier production facilities, and an AI-enabled tech stack, the Carma team has redefined the car buying experience for Australians and we expect them to continue to take market share from the traditional offline channels."
The company is scaling up as similar companies in other global markets, such as the US, now generate billions in annual revenue.
"Around the world, businesses with similar models are scaling rapidly, proving the immense potential of a digital-first, customer-centric approach in the pre-owned automotive sector," says Carma director Jason Lenga.
"The success of this model has laid the foundation for a multi-billion-dollar industry, reshaping the way people buy and sell cars online. Carma is leading this revolution in Australia and is providing more Australians with a seamless and trusted experience."
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