Brazilian digital auto marketplace InstaCarro revs up with $23M in funding ' TechCrunch

InstaCarro is a digital marketplace that connects Brazilian used car sellers and dealers in Brazil. It has raised $23 Million in a Series B round.Notably, the investment was co-led by U.S.-based companies, such as J Ventures, FJLabs, and Rise Capital. The financing was also done by Spain's All Iron Ventures, Big Sur and others. InstaCarro, a So Paulo-based company, has raised $56 million in the latest round since 2015.We all know that the COVID-19 pandemic caused an increase in online sales of cars and other goods. InstaCarro will use its new capital to capitalize on this shift and expand its reach in Brazil.The startup was only active in So Paulo until this year. It launched operations in eight cities in the first half this year.The startup is compared to Carvana, Chehaoduo, and Carro in India, for context.After co-founding a Rocket Internet car classified startup in Asia, CEO Luca Cafici founded InstaCarro. Cafici says that this experience taught him that car ads were not the solution to people's problems when they sold their cars.He was inspired by the success of Auto1 in Europe and decided to go back to Latin America to create a similar model. Brazil is the third largest market for cars in the world.According to Cafici, InstaCarro today is the largest Brazilian used car buyer. The company has helped more than 35,000 people sell their cars to dealers since its inception. It has also transacted more R$1billion, or US$193.2m, since its inception. Since the inception of COVID, the startup has grown 21% per month and is now profitable. Cafici stated that profitability has increased by almost 10x over pre-pandemic levels.InstaCarro plans to grow its car trading platform into a full-service platform. Its customers have indicated that they are interested in purchasing a car through InstaCarro.The current model makes it seem simple. InstaCarro visits customers to inspect their vehicle and takes more than 150 photos. The company then auctions it through its network of over 4000 dealers in Brazil. According to Cafici, customers receive a bid on their car within 24 hours. InstaCarro then pays the customer that day and handles all paperwork.He said that auctions are a crucial component in achieving a great price because there is no consensus on the true value of used cars. You will get a higher price if you speak with more dealers.Cafici stated that the startup plans to use the new capital to expand its coverage and to make its digital auction process more efficient. Naturally, it also plans to hire. InstaCarro currently has 120 employees and plans to increase that number by 2022.The company was a partner with major supermarket chains before the pandemic. Cafici stated that the company began inspecting cars at sellers' homes after the pandemic. This has helped the company grow and move faster.We had to reinvent our business model after the pandemic. TechCrunch learned that most of our operations were dependent on central inspection sites. We had to close them down overnight in March 2020. Last year was difficult and frightening for our customers, dealers, and ourselves. Our team worked hard on redefining our home inspection business model so we could keep doing business safely. Instead of having clients come to inspection sites, we started going directly to their driveways.Over 90% of customers today prefer to do all their business online.John Nordin, J Ventures, said that his company was impressed with the way J Ventures shifted its business model following COVID and is now growing at a faster pace than ever.Nordin stated that digital car dealerships are thriving in all markets, including the U.S., U.K, Indonesia, Mexico and Mexico. It is a difficult task for the team or teams building a Brazilian digital car dealership to not only figure out how to make the model appealing to Brazilian consumers but also handle the daily operations of selling and buying a large number of cars. InstaCarro has the right people to meet the challenges ahead.