Carspring launched in the UK as an online used car marketplace, inspired by Carvana's success in the US. The pitch: buy a used car entirely online, get it delivered to your door, with a money-back guarantee. The company raised £5M from Rocket Internet and others. It inspected, refurbished, and sold cars directly to consumers.
Company Data
- Founded: ~2015 — UK (Rocket Internet)
- Total Funding: £5 million
- Failed: ~2017
Online used car sales are capital-intensive and operationally complex. Every car needs inspection, photography, reconditioning, and delivery—costs that add up fast. The UK used car market is highly competitive with established players like AutoTrader. Carspring's unit economics were negative on nearly every sale. The company couldn't raise follow-on funding and shut down.
Key Lesson
Online car sales are deceptively capital-intensive. Between acquisition, reconditioning, and delivery, the per-unit costs often exceed margin. Carvana survived through massive scale and capital—most can't.