Gearing up for an automotive revolution
Earlier this month, London-based vehicle data startup Cazana secured a massive €1.75m in funding. The money will be used to drive monetisation of the company’s B2B sales and spearhead the rapidly growing firm’s expansion into the US.
Founder and CEO, Tom Wood, talked us through the major changes going on in the auto sector and how Cazana is positioning itself to be in pole position…
Auto sector revolution
There is a huge amount of technical innovation within the automotive industry at the moment.
Whilst innovation was traditionally limited to vehicles themselves, manufacturers and lenders are rapidly starting to challenge the norms of ownership with new vehicle access models including pay-as-you-go and subscription products, as well as longer term lease/hire agreements.
In the UK alone there has been a huge shift in car purchase habits over the past five years with just 12 per cent of vehicles now purchased outright and the remainder on some form of finance.
Our team has big plans for both Cazana and Car & Classic and we're making some significant improvements to the way that vehicles are valued and accessed.
That said, we were pleasantly surprised by the huge amount of support we received from our customers and fans reaching 160 per cent of our target investment and becoming one of the fastest ever overfunded companies in Crowdcube history.
I put our success down to the great need the business fulfils and our significant traction to-date but also the amount of incredibly knowledgeable industry experts we have on our side, both as investors and on our board.
The fact that Passion Capital, backers of Monzo and Nested, not only led the raise but added £100k of additional funding during the public fund is a fantastic vote of confidence for other investors.
Developing the Cazana brand
Cazana and Car & Classic enable brands and dealers to be much more efficient with their marketing spend, helping them to focus on the vehicles and customers where their products and services will resonate best.
The businesses help dealers target in-market consumers and optimise their stock mix for a fast changing customer market.
We help dealers understand which vehicles currently resonate with customers in their sector and location and how to price those vehicles in order to attract interest.
Auto firm or technology company?
Cazana is a technology business. Technology and data science are a massive part of our business and our team of data scientists and developers have developed award-winning technology.
Technology is the driving factor behind the business’s success to date and without we wouldn’t have been able to build the first new valuation tool in 80 years!
However, that said we do also sit in the auto sector and are fortunate enough to have some of the industry’s biggest names on our team and on our board including the likes of David Hammond and ex RAC MD Robert Diamond.
Value of previous MarTech experience
Probably the biggest help that my previous M&A experience has had in recent times is with the acquisition of our new subsidiary, Car & Classic.
I identified the business some time ago as a great fit for Cazana with decades of historic price movements, a rich database of vehicle details and a huge consumer audience visiting the marketplace every day.
The shift in ownership to ‘usership’ we’re witnessing isn’t a new phenomenon born in the car industry, and the rise of the subscription economy is occurring across every sector including music, media and even touching food.
With increasingly limited space and resources coupled with a growing desire for products and services, our motivation to own things is reducing.
It’s about realising that the automotive industry isn’t a separate bubble and needs to embrace our changing attitudes as a society.
The reality is there will always need to be a mix of vehicle access models in order to suit the vast range of different use cases out there on the market.
Central city dwellers may be able to manage with cars on demand like Uber and Zipcar, but there will be rural customers that will require sole access to vehicles to support their commutes/school runs and maintain mobility.
The risk of a changing market is sometimes that people jump on the bandwagon of assuming all changes will be pervasive and immediate - i.e. "everyone will be in self driving cars in five years’ time" – but the reality is a mix of ownership models will be required for a mix of use cases.
The ‘new automotive consumer’
The new automotive consumer is simply one who wants the same information and transparency they experience in other areas of their life to be present when it comes to buying and driving cars.
Cazana’s business model revolves around empowering consumers with information and giving them the tools they need to make the best decisions for them whether they are buying or selling a car.
Automakers need to also be aware and adapt to consumer’s new, developing needs, such as environmental concerns as well as health and safety.
Spreading the word
We've been lucky to have a lot of word of mouth marketing from customers that have used and benefited from our products previously.
We are lucky to have some of the largest dealer groups in the country benefiting from our services, as well as millions of customers monthly and these people all talk so we benefit greatly from recommendations - testament to the quality of our product.
We use many different Marketing technologies and it’s hard to credit just one. The primary ones we are using are HubSpot, Mailchimp and of course Google AdWords.
The most valuable resource however is our human capital - there will always be new channels and technologies and our ability to react to new channels and choose appropriate is very important.
When it comes to marketing tech resources we have always kept an open mind and have been willing to try out different resources until we come to the one that suits us a business.