Clutch, Canada’s first online car retailing platform, is poised for growth after raising $100 million Series B equity financing.
Dan Park, CEO of Clutch, said the company, which began in 2016, acquires a large selection of inventory for consumers based from a number of different sources.
“We take that inventory through our production process which involves reconditioning the vehicle, inspecting the car, photographing the car and putting it up on our website, do a 210-point inspection, fixing any cosmetic imperfections to a certain extent, and then selling those directly to consumers through our website,” said Park.
“The best comparison is Amazon for cars. You go online, you see the car you want, you buy it and we deliver it right to your door.”
Clutch is modernizing the car buying experience across Canada. It is headquartered in Toronto and services Alberta, British Columbia, Nova Scotia, New Brunswick, Ontario, and Prince Edward Island. Its first market was in Halifax.
Recently Clutch was named one of the Fastest Growing Canadian Companies by the Globe & Mail and one of the Top Canadian Startups by LinkedIn.
It was 47 out 448 in the Globe’s list with a three-year growth rate of 1,287 per cent. It was 14th on the 2021 list of LinkedIn’s Top Startups.
“We’ve grown considerably from that kind of fledgling startup that we were back in Halifax to one of the largest retailers of used vehicles in Canada now. It’s still a long way for us to go,” said Park.
“What we really pride ourselves on is the customer experience and the quality of our vehicles. The quality of our vehicles being the paramount of what we’re doing. For us, when we first started it was crazy that in Canada the really two only options to buy a car were either to a dealership and spend five, six hours haggling over the price and having to go back a few times . . . Or you meet a stranger in the Tim Hortons parking lot which isn’t that much better.
“For us, we’re trying to provide that really great customer experience when it comes to buying a vehicle. We wanted to make it feel like magic. You click a button and a car shows up the next day but also gives you all the insurance of the highest quality. We have our 10-day money back guarantee, a complimentary 90-day warranty and we individually inspect every single car that we have on our site to make sure that the quality is the highest level for the consumer.”
The recent financing round was led by D1 Capital Partners with participation from Flight Deck Capital, Canaan Partners, Upper90, Real Ventures, GFC, Brand Project, and FJ Labs.
“We believe consumers are seeking to buy higher quality pre-owned cars with greater convenience and more transparent pricing,” said Scott Baxter of D1 Capital Partners. “We are excited to invest in the outstanding team at Clutch, help improve the car-buying experience for Canadians, and continue to back leading auto ecommerce franchises across global markets.”
With this funding and support, Clutch plans to strengthen operations in the existing markets it serves, which includes Alberta, British Columbia, New Brunswick, Nova Scotia, Ontario and Prince Edward Island, as well as expand to new markets in the coming months. Additionally, the company has plans to continue expanding its product offerings in 2022, helping facilitate the entire car-buying process even further. Clutch plans to make significant investments in growing its rapidly expanding team by over 200 people next year.
“(The financing) is a vote of confidence in our ability to execute on our future plans. For us, it gives us a lot of obviously financial resources to go and hire more folks, increase our capacity to far more vehicles and offer more selection and continue to build the infrastructure and service more markets,” said Park, adding that the company is selling “thousands” of cars every year, but he would not specify a number.
“We think the Canadian market is ripe for disruption. The way Canadians have bought and sold cars hasn’t changed in almost a century.”