The Unfiltered Story of Our Road to £103 Million
This is the story of Carmoola's challenging journey to raise Series A funding in some of the toughest market conditions in recent years. After securing our Seed round just weeks before our launch in April 2021, we assumed raising the Series A would be a breeze. However, we soon learned otherwise. This is the unfiltered account of our journey from launch to Series A in just 10 months! If you're interested in learning about the origin of Carmoola and our pre-launch story, you can find it here 🤭
Carmoola launched with a bang on April 1st, 2022! We immediately realised that we had struck a chord with our customers by providing a faster, easier, and more affordable way to finance used cars. It feels like a lifetime ago since that day, as we've accomplished so much in less than a year. We've secured multiple rounds of funding, built out our technology, and delighted thousands of customers - all with a small, dedicated team of driven and hardworking individuals 💪
From the very beginning, we knew that we had something special on our hands. On launch day, we celebrated in a pub and were astonished to see a flood of customer applications pouring in through our app. We were glued to our Slack alerts channel, a custom integration we had built to monitor platform activity, as we saw new applications arrive every minute.
At the start we knew everyone's name! Carl this to Julie that…it was so exciting. I think we launched on a Thursday and basically could not sleep. We had planned to go to Amy’s mum on Saturday as Alfie had just had back surgery so needed looking after full time!
I remember waking up at 5.30 excited to see if this was the day we got our first customer 😀 and by 8.30 we had done it! Like all new businesses in the beginning there were so many problems. Things not working as expected which caused loads of stress as everyone wanted to WOW the customers, everyone was working so hard 7 days a week for months purely on adrenaline! Looking back it was so much fun and I really miss it!
By the end of the first quarter…the number of customers and revenue was growing rapidly, but most importantly the NPS (net promoter score) was consistently around +90 which is very high, and above average for the industry. At this stage, there were only 10 people in the team covering everything from tech, finance, customer service and product! I have to say Hanan and Amy were incredible during this phase. Not only were they amazing with the customers, they worked 7 days a week 8am-9pm to support anyone who needed help in their journey! It was really exciting to see what a powerful mix of having a great product, plus “wow“ customer service can do! We are crazy about delivering wow to our customers, and lots of them even send us pictures with their car!
The engineering team had work non stop by this point automating so much of the system and everyone was so excited about the opportunity we have! By this stage we were asking “can we build a £1B book with less than 100 people?“
Roman, Igor and the team had done an incredible job building the platform against terrible situations! Half the team were settling into a life in Warsaw after leaving their home 4 weeks before and the other half of the team were still in Ukraine! I have never met such a solid group of people! I have never heard anyone complain about the situation.. These people are a true inspiration!
Things progressed fast and our Investors had been so supportive during this first phase, but we were scaling quickly and solving multiple problems while running on very little cash.
With a product that customers loved, and very strong unit economics, we started raising the Series A in the summer just 3-4 months after launch. I thought this would be a breeze with the metrics we were showing! But I was about to be proven very wrong! It ended up being one of the hardest things I have ever done.
I think it's fair to say not every VC understands how lending businesses work, and this coupled with a crazy macro environment made it one hell of a challenge 😳 But I love a challenge! I was getting a lot of no’s and cash was running low plus It was getting into August, and everyone in the VC world was on holiday.
I thought I would take a short break at the end of the month, but it seems everyone woke up just at that moment, and so I ended up working for most of the holiday doing multiple IC video calls! Not the worst environment to work in I suppose 😉
I found it personally a real struggle pitching on zoom calls. As a bit of an extrovert, I get so much energy from other people, and I’ve found that there is no feedback on a video call and so my energy is dying away (not something I struggle with face to face). You can’t see anyone’s face. It was soul destroying! After more no’s at the final IC stage… it was really knocking my confidence but I took the feedback onboard and it made me stronger! To me it's crazy how some of these investment decisions are made! A lot of people seem to make conscientious based decisions which is a sure way to get average returns!
Anyway…I’ve since done some additional training which I would highly recommend to anyone that has the same challenges with video calls. However at the time I was trying to fundraise, this was not helping things 😡
I believe I am born very lucky and as always…. on the last day of my holiday just after I had heard another no -- Yusuf from QED reached out for a chat. For Carmoola, it was really important to partner with a VC that gets lending and can add value to the business, so QED was number 1 on my list!
Six weeks later we got a term sheet from QED, which was one of the best days of my life! Yusuf was outstanding during the process and so great to work with. We had interest from our current investors and a couple of other funds. We shortly had the round ready to go and this was swiftly followed up by lining up Natwest for the debt required for scaling.
I have since had the pleasure of meeting the rest of the QED team including Nigel Morris which was amazing. If anyone is looking to raise series A you will not be disappointed with the support you get and the knowledge they bring to the business is so valuable!
We have now doubled revenue in 3 months since QED invested, and have grown our NPS score to over +95 while still running the business with only 18 people. A special thanks needs to go to everyone in the team at Carmoola for all their hard work and dedication, and also to go to some of our investors Mark Ransford, Will Neale, Micheal Pennington, Ugo Arzani, Dan Cobley, Yusuf Ozdalga, Seb McDermott but last and not least Alistair and Apostolos from VentureFriends for their continued support.
I’m super excited to see what the next 12 months will bring at Carmoola. Watch this space 😉