German online car marketplace Auto1 has raised €460 million from Japanese giant Softbank.
The Berlin-based company develops a platform for buying and selling used cars. The funding news was first reported by The Financial Times. Auto1 was founded in 2012 and according to Reuters had revenues of €1.5 billion in 2016.
Softbank’s investment comes from its $100 billion Vision Fund – it is the Japanese fund’s first German investment – and values the company at €2.9 billion, placing it just behind Spotify as Europe’s second most valuable privately-held company.
“We believe that the Fund’s deep investment and technology expertise will help us to accelerate our growth as we continue to focus on making the used vehicle market more efficient and transparent,” said co-CEO Hakan Koç.
“AUTO1 Group has built a fast growing, data-enabled platform introducing efficiency and transparency to the fragmented used car market, which is worth more than $300 billion annually. The SoftBank Vision Fund’s capital and our operational expertise with marketplace businesses will support continued global growth,” added Akshay Naheta, partner at SoftBank Investment Advisors, who is joining the board.
Auto1 previously raised €360 million in equity and debt funding from investment firms like Princeville Global and Target Global, and financial institutions such as JPMorgan Chase, Goldman Sachs, and BNP Paribas.
“We’re delighted for [founders] Christian [Bertermann], Hakan [Koç] and the whole Auto1 team, this is a huge validation of their strategy and execution capabilities,” commented Andrin Bachmann at Piton Capital, one of Auto1’s existing shareholders, regarding the Softbank investment. Piton led its Series B round in 2014.
“Over the past five years we’ve seen them grow from a startup to a world-class marketplace. I believe network effects are one of the very few genuine barriers to entry in technology businesses and Auto1 have demonstrated that when leveraged correctly they create exponential value,” he said.
Softbank’s Vision Fund, which has raised money from Apple, Qualcomm, and the sovereign wealth fund of Saudi Arabia among others, has invested billions into companies including NVIDIA and WeWork. In Europe, it acquired UK semiconductor giant ARM Holdings for $32 billion in 2016 and invested $502 million into gaming firm Improbable last year.