The Series B round was led by NGP Capital, formerly known as Nokia Growth Partners, a fund backed by the Finnish telecoms giant. This is part of its “smart mobility” investment strategy.
“We are looking for promising companies in the mobility sector globally and believe that the integrated model across the value chain that Caroobi is building has huge potential. The team is great and we are looking forward to supporting the company’s international expansion and building a global category winner,” said Walter Masalin, Partner at NGP Capital, in a statement.
Other investors in this round include Target Global, BMW iVentures, DN Capital and Cherry Ventures.
The BMW investment is financial, co-founder and MD of Caroobi Mark Michl said in an interview, with no strategic plans for now between the two. Although BMW an iconically German company, the iVentures arm is actually in the Bay Area; Caroobi, in fact, is iVentures’ first investment in BMW’s home country.
Caroobi is not disclosing its valuation but I understand that it is now over $100 million. The company is not yet profitable, by design, and has raised around $30 million to date.
The amount of this investment is notable when you consider the size of it versus the potential of Caroobi’s business today. The company says that in its current German footprint, for example, it works with only 750 mechanics today, but with a total addressable market of around 35,000 mechanics. It’s currently servicing some 2,000 cars per month and growing 100 percent month-over-month.
“The market potential is huge, and we currently have well below only one percent of it,” Michl said.
As Michl and his co-founder Nico Weiler explain it, Caroobi is providing a platform to fill what is effectively a gap in the legacy automotive market.
In many countries, one of the most common routes for repairing a car, or getting it serviced, is to use an independent garage or mechanic. But these days, as much of the process of finding and contacting tradespeople has moved online, much of the mechanic world has not come along.
You may find some recommendations on services like Yelp, and even some targeted directories that help direct referrals for independent mechanics to quote for work, such as WhoCanFixMyCar in the UK, or even services that come to you on-demand, such as YourMechanic in the US.
But what’s largely lacking is a platform that not only helps match up car owners with mechanics and their garages, but also provides those customers with transparent price lists and helps to manage not just bookings, but payments and potentially disputes (and soon, service guarantees). On top of that, the Caroobi platform offers services to the mechanics themselves.
“There are two customers we are addressing,” said Michl. “One is consumers, who often may not know if mechanics are offering them fair quality and price. We are getting around that by offering services directly to customers,” he said. “Two is the mechanic.”
Mechanics services come in two parts, Weiler said. The first is the customer-facing side, Caroobi is giving mechanics are more efficient way of interfacing with customers, with accounting and billing software that links up with Caroobi’s back-end, and scheduling tools to book in appointments. Weiler said that Caroobi’s customer referrals typically account for 50 percent – 60 percent of all mechanics’ jobs once they join.
The second is the supplier-facing side, which is a newer area of business for Caroobi. Mechanics typically work with either a small group of distributors, or more likely one or two purchasing groups, which gives the mechanics less flexibilty in what they can order, the general supply levels, and how much everything costs. Caroobi currently sources parts from over 100 distributors and manufacturers, giving those mechanics a better selection and likely more competitive pricing.
“For mechanics, the parts acquisition process has always been intransparent and inefficient. By sourcing our parts directly from manufacturers we are establishing a lean, efficient process in the market, which becomes more cost effective for our customers and partner mechanics.” Michl said.
Caroobi is not disclosing what this works out to in terms of actual prices, or what kind of a cut Caroobi gets from it. Michl does say that the company takes a small percentage for every kind of transaction, and that these often work out to be competitive or even cheaper than what the mechanic might have charged, were he working directly.