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Banco BV Leads a R$15m Series A in Used Car Marketplace Carflix

30 June 2020

Banco BV led a R$15m Series A in Carflix, a Brazilian used car marketplace focused on regional transactions.

(Contxto) Buying a new car provides the assurance of getting a vehicle that’s in the best working conditions. Purchasing a used vehicle… not so much. Consequently that’s where people have to be careful and get a little help from friends, family or a startup.

So to assist more people in the used car market, Brazilian Carflix closed its Series A for R$15 million (~US$2.7 million) in an investment round led by BV bank. The startup will use the funds for tech development and to grow its operations.

“The used car business asks you to be in more than one place,” says Fábio Pinto, Carflix’s co-Founder. “It is difficult to sell a used vehicle from Salvador to São Paulo.”

Rightly so, potential buyers can be agnostic when it comes to geographic locations if it means a reasonable price for a good car.

This isn’t Carflix‘s first rodeo show as it had previously raised R$2 million (~US$370,000) in 2019.

Why it’s a big deal: Used car sales in Latin America tend to take place person-to-person and thus are highly informal. That represents an opportunity for better deals or fraud. When platforms like Carflix step in, they help add a touch of security to this market segment that’s still largely unexplored.

Marketplace Carflix

Through its platform, users can more safely buy a used car because Carflix inspects the vehicle and handles the negotiation process before a transaction is completed. Thus, saving buyers the unpleasant surprise of falling prey to fraudulent schemes.

At the moment, the startup’s vehicle inspection process is carried out in person—sellers just schedule an appointment on the platform. However it has some interesting tech-related plans in the works to change that.

Carflix told Exame that it’s developing software to inspect a car using photos sent by the vehicle’s owner.

“The customer will take pictures of the car and we would complete a remote analysis through artificial intelligence,” explains Pinto.

This is big in terms of scalability as it would erase some of its geographical limitations for accessing the used car market. Plus, it cuts down the need for staff to go and personally check the car.

Although that comes with the drawback of coaxing car sellers and buyers into trusting its tech’s accuracy to spot inconsistencies or whatever else “might be under the hood.”