6 Jul 21

CarNext raises €400m and goes independent from LeasePlan

CarNext has raised €400 million to accelerate growth and has been carved out from LeasePlan into a fully independent business. Its new owners are a consortium of investors including TDR Capital (a subsidiary of the Abu Dhabi Investment Authority), GIC, PGGM, ATP, and Goldman Sachs Asset Management. 

The ‘emancipation’ of CarNext, one of Europe’s leading online B2C and B2B used-car marketplaces, is not entirely unexpected, observes Fleet Europe Expert Pascal Serres: “In its 2020 financial report, LeasePlan had already announced that CarNext would become a stand-alone business from 2021, sourcing cars from third parties and generating revenues for the group.”

It should be noted that the separate consortium taking over CarNext consists of virtually the same partners as the one continuing to control LeasePlan. That’s why this should be considered primarily a strategic move, says Mr Serres: “The consortium led by TDR considers the parts of LeasePlan’s two business segments – CarNext and Car-as-a-Service – greater than its sum. Used-car dealer platforms have very high market values. The best example is Carvana in the U.S., with a market valuation of $46 billion.” 

Asset Control Tower

“In this new phase, CarNext can expand its portfolio independent of LeasePlan, for example by working with OEMs or other large fleet companies. CarNext will thus be able to offer a quicker response to certain customer demands, for example when it comes to petrol, hybrid, and battery-electric vehicles,” explains Johan Verbois, Fleet Europe Remarketing Expert. 

“Until now, CarNext was mainly dependent on supply by LeasePlan, whose end-of-lease vehicles are mainly diesel.”

Having an independent and wider portfolio will also benefit and enrich CarNext’s Asset Control Tower (ACT) – the algorithm that determines when and where to sell the assets on its books. 

Long-Term Service Agreement

However, important links remain between CarNext and LeasePlan. Specifically, CarNext has signed an exclusive Long-Term Service Agreement with LeasePlan, guaranteeing a supply of close to 300,000 high-quality used cars annually to sell through its B2C and B2B marketplaces across Europe. It is expected that this will provide a strong foundation for future growth. 

Launched in 2018, CarNext’s B2B operations are now present in 22 countries. Its B2C marketplace has a presence in seven of Europe’s largest markets. In 2020, CarNext sold 40,000 cars via its B2C channel, and 200,000 via its B2B auction platform and trader app, representing a gross merchandise value of €2.5 billion. 

€400-billion market

CarNext’s new funding puts it in a strong position to expand across the European used-car market, worth €400 billion in total. The plan is for CarNext, now an independent company with strong financial backing, to accelerate vehicle sourcing from trusted third parties, to expand its offering across Europe, and to further boost its growth to increase its customer base across Europe.

  • Over the past year, CarNext has accelerated growth in its core B2C markets, for example tripling its sales volume in France. Thanks to an increase in Cars on Display (COD) to an average of 3,000, France is now also CarNext’s largest online used-car marketplace. 
  • From this month, CarNext is also specifically targeting growth in Germany, with the aim of becoming the country’s largest online used-car marketplace by the end of this year. 

“A great day”

“The timing (of CarNext’s new funding and new ownership, Ed.) could not be better,” says Maarten van Neerven (pictured right), Managing Director and CFO at CarNext. “Post-Covid, more people than ever want to buy their next used car online, and we have the cars and technology to deliver.”

“This is a great day for used-car customers,” said Tex Gunning, CEO of LeasePlan. “LeasePlan will continue to focus on what we do best: leading the car subscription megatrend, supported by an industry-leading remarketing partner delivering the best prices for our high-quality used vehicles. I am extremely proud of the fully digital business model we’ve built at CarNext, and wish our colleagues every success as they continue to disrupt the exciting used car market."

Authored by: Frank Jacobs