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Carcela

Platform:
Crowdcube
Stage:
Expansion
Industry:
Business Services
Location:
UK - London
Date Rated:
18/12/17
Raise:
£500,000
Equity:
3.5%
Valuation (Pre Money):
£13,785,714
Industry: Business Services
Location: UK - London
Platform: Crowdcube
£500,000 Expansion
Valuation: £14,285,714
Date Rated: 14/12/17

MANAGEMENT

PRODUCT

INVESTMENT
Tax Status: SEIS & EIS

Business Summary

Carcela is a peer to peer marketplace aiming to bring trust and simplicity to the second-hand car market, managing every step of the selling or buying process with cars picked up, fully inspected and delivered to customer premises. Carcela has sold over £7m worth of cars in under 12 months since launch with a limited marketing budget. This round of investment will be used to fund working capital to support growth.

Financial Overview

Dec-21
Date (y/e) Dec-17 Dec-18 Dec-19 Dec-20 Dec-21
Sales Dec-17£535,900 Dec-18£16,065,000 Dec-19£38,745,000 Dec-20£68,439,664 Dec-21£122,907,804
Gross Profit Dec-17£200,000 Dec-18£12,719,400 Dec-19£30,676,200 Dec-20£54,186,832 Dec-21£97,311,767
GP as % sales Dec-1737% Dec-1879% Dec-1979% Dec-2079% Dec-2179%
Overheads Dec-17£181,423 Dec-18£5,780,193 Dec-19£13,552,679 Dec-20£23,899,687 Dec-21£42,909,820
Operating Profit Dec-17£18,577 Dec-18£6,939,207 Dec-19£17,123,521 Dec-20£30,287,145 Dec-21£54,401,947
OP as % sales Dec-173% Dec-1843% Dec-1944% Dec-2044% Dec-2144%
Closing Cash Dec-17£11,890 Dec-18£6,519,504 Dec-19£16,199,144 Dec-20£29,231,969 £53,346,770

Note: This financial information has been sourced from the company on 14/12/2017. Financial data is NOT verified by Wheatfromchaff Ltd.
62%
SKILLS:
EXPERIENCE:
COMMITMENT:
The company has a balanced team covering every key role required to drive growth but such rapid expansion will present a strong challenge to them.
The Founder is a young entrepreneur but he has already achieved an exit and now a management team with significant start-up experience will support him.
Although he has invested limited time in the company so far, the Founder seems fully dedicated to it and he has paid some salaries with his own funds.
46%
MARKET:
PRODUCT:
COMPETITION:
The ratio of used-car to new-car transactions is growing as the digitization continues and the market is worth over £49bn in the UK already.
There are no testimonials about how the product is functioning but only 3 of 600 vehicles sold have been returned and Carcela has achieved significant commercial traction in just one year.
Carcela aims to grab rapid market share providing a professional car inspection and bringing the car to the customers' home but competition is likely to increase as it is easily replicable.
29%
PROFITABILITY:
CASHFLOW:
RETURNS:
The business model looks attractive and Carcela could scale sales rapidly but the sales projections are extremely aggressive and overheads could ramp up faster than expected.
This round of investment provide enough working capital to achieve break-even but there is limited headroom in the forecast and the revenue streams are not yet fully established at any scale.
The Founder states he has already received an approach to buy the company but given the high valuation, investors should not expect more than modest returns unless ambitious forecast delivered.


Conclusion

Barriers to entry are low and many players could develop a similar service, therefore, the risk of replication is high at this stage. However, the team aims to be competitive and gain further brand awareness with the door to door service, exhaustive inspection of every car and 14 day money-back guarantee.

Investors should note that in order to achieve this forecast further funds may be needed to support the marketing budget, and if further funds are raised as equity, only investments of over £20k will secure pre-emption rights.

Related Links

Crowdcube Pitch

carcela.com

 

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The Ratings we publish have been approved and issued at Financial Promotions in the United Kingdom by Wheatfromchaff in the United Kingdom who is Authorised and Regulated by the Financial Conduct Authority FRN: 751017. Wheatfromchaff Limited registered office is Kilver Court, Kilver Street, Shepton Mallet, Somerset, BA4 5NF and telephone number +44 (0) 1749 347 577. Telephone calls may be recorded. VAT No: 214 0196 49

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