Q: WHAT MAKES CARWOO! AN INTERESTING INVESTMENT FOR INTERWEST?
Doug: This year consumers are expected to purchase 12 million new cars in the United States. 98% of buyers will research their purchase online — and then the vast majority will drive to one or more dealers to make the actual purchase. At the dealership, they’ll face the prospect of in-person negotiation — a process that most consumers dislike. CarWoo! offers a way for consumers to compare competing offers from dealers in the privacy of their homes, saving time and money. In a nutshell, car buying is a huge market that CarWoo’s service promises to disrupt by elegantly solving a very real consumer problem.
Q: WHAT MAKES CARWOO! AND INTERWEST A GOOD FIT?
Doug: At first glance, CarWoo! is simply a great service for consumers. That’s certainly true. But the company is also providing an innovative customer acquisition service for car dealers, more than 3,000 of whom have already signed up. InterWest has invested in a number of companies that, like CarWoo!, are seeking to redefine the ways that brands and companies acquire and monetize new customers. Invidi and Brand.net are two examples in the media and advertising sector. Another, Marketo provides marketing automation software to companies across a range of industries. For car marketers, CarWoo! is a new, much more efficient means to acquire new customers. In the future, that should allow CarWoo! to tap into the $50 billion that car manufacturers and dealers spend on advertising and incentives each year.
Q: YOU’VE DESCRIBED CARWOO! AS A WIN-WIN FOR CONSUMERS AND DEALERS. TELL US ABOUT THAT.
Doug: The prices that car buyers get from different dealers can vary substantially. It isn’t simply because some of us are better negotiators than others. At any given time, each dealer is at a different point in their inventory cycle and with the incentives that manufacturers provide to dealers. CarWoo! allows consumers to review multiple dealer offers through CarWoo’s website, without disclosing their personal information. While they’re doing that, bids from individual dealers are visible to the other dealers, who can make counteroffers. That gives purchasers confidence that they are getting the very best price. Dealers get the benefit of being introduced to highly qualified potential customers. CarWoo! customers are paying to use the service and have declared their intent to purchase a specific model. That allows dealers to cut their cost of customer acquisition and make the sales cycle more efficient.
CarWoo! has a very strong founding and executive team. They’re starting with the consumer in mind, which they’re well-equipped to do because they’ve each experienced the frustration involved with purchasing a new car themselves. Also, they don’t come out of the automotive business. That has allowed them to think creatively and to be fearless in attacking this problem with a fresh perspective. CarWoo! also has a top-flight extended team, as well — including some of the strongest and most experienced people in the online automotive industry — who are working with the company as advisors and investors. Altogether we think they’re well positioned to succeed.