Spotawheel was founded in Athens by Charis Arvanitis, Christos Zis and Kiriakos Agadakos. The team came together to found Spotawheel in 2016 in an effort to offer a frictionless buying experience for used cars through a unique platform that helps buyers find the right car at the right price. Through their predictive analytics, Spotawheel identifies which used cars are most likely to be reliable, and offers them to consumers with a five-year warranty. The company's purchasing platform aims to make the car buying process easy, and provide peace of mind for their consumers. Spotawheel is active in Greece, and in May 2019, the company began operations in Poland. Earlier this fall, Spotawheel picked up a €5 million funding round led by VentureFriends, with participation from Velocity Partners.
I connected with Charis and Kiriakos to learn more about the company and what’s next for Spotawheel.
Hi Spotawheel! Congratulations on your new funding round, and your expansion into Poland! The used car market is a really exciting one in Europe, something we’ve talked about extensively on our podcast (most recently, see tech.eu Podcast #130). It’s also a space that has received quite a lot of investor attention. Can you talk a little bit about the opportunity in this market, and how Spotawheel’s offering is unique?
The used car market in Europe is a huge industry with the size of approximately €55Β in Gross Profit terms with more than 35 million cars sold annually. It’s a market operating mainly offline, not equipped to deliver great customer experiences, facing a lot of trust and transparency issues that the typical customer is aware of. These deficiencies is what we translated into opportunities. Spotawheel redesigned the buy-sell process by investing in customer-centric technology to source reliable cars and support the customer during the research, purchase phase and on, providing peace of mind with warranty and money return policies in place.
Spotawheel’s solution involves buying used cars upfront and offering purchasers up to 5 years of limited warranty. This is a big investment for a startup. Can you tell us a little bit about Spotawheel’s unique “predictive analytics” that help you to identify which cars are most likely to be the most reliable and best value?
Since 2015 that we launched Spotmechanic, an on the spot used cars inspections service, we have inspected hundreds of thousands of European cars. By utilizing these inspections’ data, along with market data we collect, we have created proprietary models that predict cars’ reliability and as of now it has proven quite accurate. Moreover, this is a decision tool that takes into account the specific car’s quality, the commercial profit opportunity and market trends, to make us choose faster the right cars, price them accordingly and sell them as fast as possible. By developing such a predictive analytics model, we can grow our inventory faster and more efficiently in the markets we operate, allowing us to grow at scale.
One of the challenges you’ve outlined in the European used-car buying experience is that it is hard to trace a vehicle’s history if cars are moving across the continent. How is Spotawheel able to fill in the details for these used cars, and ensure that customers know the complete background about the vehicle they’re purchasing?
Maintenance and accident history, real mileage and previous owners info are points that need special attention, on which we invest continuously to maintain our edge. Our proprietary inspection technology covers all these points physically, and combined with our predictive analytics mentioned earlier, we can safely decide whether a car can be a great and reliable purchase for the future. We are really proud of our processes, allowing us to offer up to 5 years of limited warranty, the largest in Europe, and a 7-day return policy.
You moved into Poland in 2019. Can you talk a little bit about the decision to move into the Polish market? Why did you choose Poland in particular, and what are some of the most exciting things about the Polish autotech market?
The Polish market is one of the largest European markets with quite fragmented supply and serious transparency issues. Buyers in Poland are cautious and aware of the non-transparent profiteering techniques, while feeling that the purchase of a used car is an over-complicated process with hidden-fees. These are exactly the problems Spotawheel provides a solution for. Furthermore, in Poland we saw that there is a remarkable high number of digital services that have already penetrated the market, touching the whole spectrum of car usage, from research to purchase, maintenance, security and resale. These are indications of the Polish consumers’ orientation towards digital experiences in the immediate future, a fact which position us best to achieve our end state target: selling cars purely online.
What advice would you have for other founders looking to scale to new geographies in Europe?
Firstly, a product should have a clear and simple mission. That mission combined with the right market research should help founders identify the risks, opportunities and how they can diverse their product from what the local players offer. After locating the new market, it is important to take quite some time to “understand” the language. While having a centralized team is very important, hiring personnel from the specific target-market will help you understand the work culture, the business environment and whether customer messages are relevant and correctly interpreted. International expansion should not be something founders are afraid of. On the contrary, it is an exciting opportunity that should always be pursued. Extra tip: the more difficult and complex it is to expand, the more defendable the model is against new market players looking to get a share of the pie.
Spotawheel is headquartered in Athens. What are some of the assets of the Athenian tech ecosystem, and what do you think others should know about Greek startups?
The orientation of young people towards technology is evident and new educational programs on the subject of technology and digitalization are constantly being created. This fact makes the personnel search in the technology sector easier. The recent financial crisis also pushed more people into entrepreneurship, leading to a radical mindset change. Regarding the Greek startup scene, although it is still relatively small, it will eventually grow and mature, as more and more Greek startups expand internationally and attract global funding. The fundamentals are there, it is a matter of time.
Looking back on your journey thus far, if you had to impart one key piece of advice for other early stage founders, what would you tell them?
Be comfortable with the unknown, expect a constantly changing environment, take risks, ask for help.