Carmoola: Car finance fintech raises $125 million in debt and equity

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Car financing fintech Carmoola just raised $125 million in a mix of debt and equity. Check out the 12-slide pitch deck it used to raise the fresh funds.

The London-based startup offers credit for used car purchases and incentivizes EVs.Car financing fintech Carmoola has raised $10.3 million in a Series A round led by QED Investors and a further $115 million in debt.

Traditionally, purchases on finances are arranged through brokers or car dealerships and often come at a premium price with poor customer service, Carmoola's CEO Aidan Rushby told Insider. A frustrating and expensive personal journey led to the former CEO of home rental company MoveBubble, moving into the car financing sector.

The service is not dissimilar to a buy now, pay later proposition, with Rushby comparing the platform to services like Klarna or fellow UK fintech. Users are assessed on their creditworthiness, offered a repayment plan, and then given a virtual card to use to purchase a vehicle from a physical dealership or through an online marketplace. Typical financing deals tend to run between three to five years with APRs ranging from around 6.9% to 24.9%.

The fresh capital will go towards expanding Carmoola's offering at a time when existing players will be struggling, Rushby said. The change in the interest rate environment and higher inflation will lead to margin compression on the loan book of larger rivals who underwrote deals prior to the energy crisis precipitated by Russia's invasion of Ukraine.

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