In Spain's fragmented second-hand car market, buying a used vehicle is a process fraught with uncertainty. Prices and quality of similar models can fluctuate wildly from dealer to dealer, region to region. Used car e-commerce platform Clicars has forged a niche in the sector through the simple expediency of putting product transparency and customer convenience first.
Launched in 2016, Clicars differentiates from competitors Cars.com, Instamotor and offline-to-online platforms like Autotrader by offering unique selling points such as 48-hour home delivery, 10% discount on monthly financing, and detailed information about the car's history.
Clicars co-founder and CEO Pablo Fernández Álvarez tells CompassList how the company's business model and partnership with Aramisauto.com, a subsidiary of French multinational vehicle manufacturer PSA Group (formerly PSA Peugeot-Citroën), has enabled it to book €50 million in revenue in just three years of operation.
This interview was conducted in Spanish and translated. It has been edited for length and clarity.
Q. What inspired you to create Clicars?
A. My co-founder Carlos Rivera and I had been living abroad where we noticed that the used car industry was more transparent than in Spain. We launched Clicars in January 2016. Originally, the company was conceived as a pure marketplace, but after listening to our potential customers we evolved to an e-commerce model.
What is Clicars’ business model?
As an e-commerce platform, we buy, recondition and sell cars and make money on the margin, and on services like car financing and insurance. Our key innovation was to eliminate the need to see the car in advance through a transparent and trustworthy approach. This way, we could offer our customers a more attractive price than the market average. Our values define who we are: transparency, simplicity, and trust.
What makes Clicars so different from its competitors?
We offer a wide selection of cars from more than 35 brands on our website or you can visit our premises in Madrid, which is the largest car exhibition center in Spain. The customer can book the car online and have it delivered in less than 48 hours. We also give a one-year warranty and the longest test drive in the market; 15 days or 1,000 kilometers. If the customer is not satisfied, we reimburse 100% of their money, something that only 2% of our customers do.
We specialize in vehicles with few kilometers on the clock and no structural damage. Our inspection standards comprise more than 250 different checks and the car is reconditioned at our center to make sure that vehicles comply with the highest standards.
We target any customer who wants a fast, simple and transparent car-buying experience, and a competitive price. We want to provide the best experience for our customer; as we say, we would like the process of “buying a car to be as fun and enjoyable as driving it”.
What is your business background and how did the company start out?
I graduated in International Relations from Complutense University in Madrid and I did my postgraduate studies at Harvard Business School. Before starting Clicars, I worked as a management consultant at Boston Consulting Group and then as Executive Vice President of Santander Bank, where I was Head of Strategy for the US businesses.
Carlos Rivera is a mechanical industrial engineer; he holds an MBA from Columbia Business School and has extensive experience both in business and the automotive industry, having worked with Boston Consulting Group, Philips Automotive, Mercedes-Benz, Renault and CSIC.
Clicars began with two employees but in less a year we set up a team of 12 talented, dynamic, well-rounded young people. Today, we employ over 60 people. Our mission is to transform the retail distribution of used cars, one of the largest industries in the world.
Tell us about the company’s milestones.
Our first milestone was to sell the first car in our first month despite not having a well-defined product. A second milestone was setting a revenue record in our first fiscal year, during which we made €5 million in revenue, something no other startup had achieved.
We have received a lot of business awards, including the “Best Team” in the South Summit 2018, where we were selected as one of the finalists from some 3,000 startups from 84 countries and were nominated for the final prize. The company was awarded the RTVE Prize “Startup Company of the Year” in 2016. We won the Talent Transformation prize of Lee Hecht Harrison in 2017 and received recognition as the most innovative startup at the Inspirational Festival in 2017. We were named the winner of “The New Business of the Year” award at the 2018 European Business Awards.
Last year we opened our logistics center which has enabled us to play with an advantage, thanks to our revolutionary and innovative technology. In our 40,000 sqm center, we recondition and certify the vehicles. This has allowed us to become the largest exhibition center of new and used cars in Spain while taking advantage of a best-in-its-class reconditioning factory.
Can you tell us about financing the business?
We started with our savings and no salary. Soon after we raised a seed round from serial entrepreneurs and senior executives in the finance and automotive industries. In 2017, we closed a capital and strategic alliance with PSA Group and its subsidiary, online car sales platform Aramisauto.com. We also welcomed investment from Seaya Ventures. This strategic alliance [with Aramisauto.com, which became a majority shareholder] was key, allowing us to grow fast and become the number one online car sales platform in Europe. At this point, we are well capitalized to continue executing our growth plan.
What are Clicars’ sales figures?
We recently reached €50 million in total revenue, taking into account the partnership with Aramisauto.com. In 2018, we doubled our vehicles sales record, with 119% more vehicles sold than in 2017. We are really proud of achieving those numbers while providing the best customer experience in the market; we have been rated 9.8 out of 10 in more than 1,000 independent customer reviews.
Do you have competitors?
The car industry in Spain is a €30 billion industry. It is very fragmented with local car dealerships, groups and multi-brand dealerships. Clicars’ business model is very specific, as we provide a combined digital and physical experience. Traditional car dealerships and brands are starting in the digital sector, but we were born digital and that is the key differentiation factor, our digital DNA.
What is your near-term goal?
We are already the number one player in online car sales in Spain and we have set an ambitious goal to sell more than 10,000 cars by 2021.
