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Aimed at preventing people from being driven up the wall trying to obtain the best car finance, Aussie digital car loan comparison-site Driva has banked $6 million in capital growth funding in a round led by early-stage investors Carthona Capital.
The latest seed raise comes less than a year after the Sydney-based fintech raised $3 million in April 2021, having been founded a year earlier Scott Montarello and Will Brown, formerly from McKinsey and Goldman Sachs respectively.
Fuelled by continuous revenue growth of 20 per cent a month, the business’ short-term goal is to increase its customer base through a partnership model strategy and recently struck deals with dominant industry players CARS24 and Carsales.com.au (ASX: CAR), the latter in the fast lane after accelerating through the ranks of Melbourne's Top Companies this year.
Remaining laser-focused on the finance offering, which seeks to make financing a new car loan more straightforward, the latest funding comes entirely from existing investors.
“We hadn't planned to kick off the fundraising process until mid-2022, but after seeing strong momentum all year, our investors encouraged us to capitalise on our traction and act as aggressively as possible - and they offered up the capital internally to support this aggression,” Driva co-founder Scott Montarello said.
Working with car finance lenders, the business offers personalised rates to customers from multiple lenders in one place on its digital platform.
“We learnt very quickly that Driva’s core product, which allows customers to get matched with fully personalised offers from 30 different lenders, was something that a lot of large industry players had started to think about but weren’t in a position to build themselves,” co-founder Will Brown, who leads Driva’s product and growth efforts, said.
“We made a decision early on to invest in what we call our partner product, which allows third parties to leverage the Driva platform to offer the same seamless experience you get on the Driva site to their own customers.”
The capital raise will go towards investing in the Driva brand, alongside scaling the internal team from 50 to 100. Although currently not a lender, the business will also start to list vehicles for sale on the Driva platform and build ancillary products like trade-ins.
Driva has relationships in place with car dealerships around Australia and works with pricing platforms like PriceMyCar, which help to provide prices instantly based on any car make or model.
Driva’s funding comes after a string of investments in the automotive fintech industry have gripped the Australian market, including online used car dealership Carma raising $28 million and car marketplace CARS24, raising $560 million, in December.
“There’s a very large change happening in the way customers buy cars and access credit, and Driva is perfectly positioned at the intersection of both of these verticals to benefit from this shift,” Carthona partner and Driva board member James Synge said.
“We’ve seen first-hand the incredible progress the team at Driva have been able to make in a very short time with relatively modest funding - so we’ve been encouraging them to think big and go hard in what is a rapidly evolving sector.”
The round included follow-on investment from the Invictus, chaired by ex-Seven West CEO and Octet chairman Peter Gammell. Angel investors participating included Stephen Dash, who made his fortune from creating the online loan marketplace Credible, and Nicolas Scudamore-Smith, who co-founded the online automotive spare parts marketplace Sparesbox.
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