“A dating site for cars”: Adelaide startup Mogo raises $1 million for platform taking the stress out of vehicle shopping
Friday, March 15, 2019/
Mogo, an Adelaide startup disrupting the car-buying process, has raised $1 million in funding and launched its test platform, as it builds up to a full launch.
Founded by Vanya Andropov and Greg Harris, Mogo is targeted at people who have done their research and know the car they’re interested in buying.
Users can then send an anonymous request to dealerships in their area, who, if they have the right car in stock, can respond with a price.
Buyers can also list their current vehicles, allowing dealerships to propose part-exchange deals.
The service is free for the buyer, and for the dealership, there is no subscription or commission, just a $7 fee to connect with a potential client.
Buyer and salesperson can then connect and chat about the details, and if all goes well they can schedule a time for a test drive.
Andropov describes the startup as “a dating site for cars”, placing particular importance on this chat function.
“It’s about getting to know the dealers you want to know,” he tells StartupSmart.
The goal is for customers to be able to “walk into a dealership and not feel anxious”, Andropov says, “because there’s nothing to negotiate”.
Andropov and Harris have been working on Mogo for about a year, and launched the trial platform in January.
Although both founders come from backgrounds in automotive sales and financing, they have built two apps together previously, one of which has been up and running for more than three years.
Combining their technology experience and knowledge of the industry, the pair “could see an opportunity from both sides”, Andropov says.
“We’ve always known the customer transaction had some pain points in it,” he explains.
Car dealerships are “right up there with politicians and lawyers” in the consumer popularity stakes, often considered not to be trustworthy.
“But car salespeople have an awful lot of pressure on them,” he says.
“If they don’t sell cars they don’t make money. There’s a lot of pressure in that world,” he adds.
Until now, the startup has been self-funded, and Andropov says the founders didn’t necessarily set out to raise capital. Rather, they spoke about the idea with a lot of people, who told other people.
Many of these people wanted to know how they could invest, and between them and friends and family, the founders secured $1 million.
The funding is being used for the launch, allowing the founders to test the functionality and user experience of the product, “and make as many changes as we can to make it more robust”.
Later, the startup will be looking for more funding to launch on a larger scale.
Through the launch process so far, the biggest learnings have come from the car sales industry itself, Andropov says.
“We’ve found out how much dealers hate the current system of advertising cars,” he says.
“We knew there was an issue in this space, but we had no idea how much they actually hated that model,” he adds.
From customers, the response has been one of “overwhelming love”, Andropov says.
“The overwhelming experience is that it’s fabulous, and ‘why hasn’t this been done before?’” he adds.
Within the next six to 12 months, the founders hope to launch on a national scale, and working on version two of the platform, making some “very significant” changes.
“There are a few extra things we will be adding to it,” he says.
Although he’s not specific, he reveals “version two has a feature in it that both customers and dealerships have been craving for a very very long time”.
“Don’t listen to anybody”
When it comes to founding a startup, Andropov’s advice is to stick to your guns, back your idea and go for it.
“Don’t listen to anybody else. If you’ve got a passion and an idea, just put it out there,” he says.
When working on Mogo, the founders had a lot of people telling them they had no hope of competing with the big players in their space.
“People are so willing to give advice when they don’t know what you’re doing,” Andropov says.
As a startup founder, you’re likely to have more doubt than confidence, he adds, and comments like this don’t exactly help.
“You can let that stop you from doing things, and you shouldn’t.”
If a startup is looking to raise, the founder advises talking to as many people as possible.
“That’s how we raised our money,” he says.
By talking about the product and showing how passionate they were about solving a problem, people bought into the idea, and the individuals.
“People respond to that. People invest in people, people don’t invest in ideas,” Andropov says.
But you have to have an elevator pitch that captures the essence of the problem and the solution, as well as showing how it’s scalable.
“If the problem is big enough, and the solution is innovative enough, then people will want to use it.”
From the frontlines
Alan Jones: How to raise investment for a startup with no customers and no revenue Alan Jones M8 Ventures partner
Canva's Melanie Perkins has 10 tips for startups with 'crazy-big dreams' Melanie Perkins Canva co-founder
Why Up's transgender controversy shows there can be no separation between founders and their companies Joan Westenberg StartupSmart columnist
Take a stand: Why being neutral hurts profitability and engagement Steven Maarbani VentureCrowd executive director
The power of passion: Naked Wines' co-founder reflects on what made the startup successful Peta Jecks Naked Wines co-founder
Hipsters, hustlers and hackers: Three instances of everyday bias in startupland Theresa Lim Play2Lead founder
Diversity and coaching will rid the banking sector of its toxic culture problem Hema Kangeson inSpur founder
Why you should find the right role for the right person — not the other way around Bruce Stronge Outfit founder