BERLIN (Reuters) - AUTO1 Group, the European digital used-car trading platform, said on Thursday it had raised 255 million euros ($300 million) from investors and would use the money to develop its retail brand Autohero.
Used car markets in Europe were brought to a standstill by the sudden arrival of the coronavirus pandemic in March, which forced the weeks-long closure of vehicle registration offices in many countries.
But as they have reopened, demand for used cars has recovered, with travellers increasingly preferring their own vehicle to taking public transport, said AUTO1 co-CEO Christian Bertermann.
“People perceive their cars as a safe place in this pandemic,” Bertermann told Reuters. “The market came out strong - we aren’t yet at pre-COVID levels but we are close.”
Founded eight years ago in Berlin, AUTO1 has grown to cover 30 European markets and has traded more than 2 million cars across its three platforms. Revenue grew by 21% to 3.5 billion euros (3.17 billion pounds) in 2019.
It will invest proceeds from the funding round in the development of Autohero, its newest brand that sells second-hand cars directly to private buyers, and includes inspection, refurbishment and delivery.
AUTO1 raised the funds in the form of convertible notes, with the round led by Farallon Capital Management and the Baupost Group. Existing shareholders, including Softbank Group, also took part.
Asked whether issuing notes convertible into shares meant AUTO1 was getting closer to floating on the stock market, Bertermann said: “These days it’s an interesting option”.
(This story has been corrected to rectify description of Autohero business model in paragraph 6)
Reporting by Douglas Busvine; Editing by Kirsten Donovan