Used car marketplace and pricing alert service Mojo Motors announced a $3 million investment this morning, led by Atlas Ventures and including existing investors RPM Ventures and NextView Ventures, among others. Mojo Motors will use the money to help it rapidly expand beyond the Boston area, starting with New York and other east coast locales, and moving westward as the year progresses, Director of Marketing Dan Harman told BetaKit in an interview.
The New York-based company grew organically in a circle out from its first beta market of Boston, where it launched in 2011. “We’re going to continue to expand geographically outside of Boston, so I imagine that New York is going to pop up on the map pretty soon, and then we’re also moving into Texas and Florida,” Harman said. After, that, the company plans to move to the west coast “in a couple months as well.”
It may seem like an aggressive pace at which to expand, especially given that Mojo Motors approaches used car dealers individually in order to pitch them on the concept and bring them on board. Harman says that nailing down the value proposition and making sure it has broad appeal is why they began with New England in the first place, though, and the company now feels comfortable that it has a strong offering to sell to car dealers.
“New England is a challenging area; you have a lot of states that are close to each other, a lot of smaller dealership groups, and so we just worked really hard to get that right,” he said. “Now with the funding set and the model really well put together, I think we can launch into these other markets much more rapidly.”
Mojo Motors works by providing free, site-specific discounts to consumers who sign up to become members and receive alerts about special pricing on used cars. It charges dealers only when cars are sold, and then it’s a flat rate fee of $349, not a percentage commission based on the value of the vehicle. The approach has a transparency and simplicity that dealers appreciate, Harman said.
While Mojo Motors competes with general-purpose marketplaces like Craigslist and eBay (Mojo Motors founder Paul Nadjarian is a former eBay Motors executive), Harman points to Mojo Motors’ pricing alerts, and its ability to negotiate exclusive pricing with its dealer partners, along with arranging special treatment in terms of sales incentives for shoppers as advantages over other more established models of buying and selling used cars online.
Another possible use of this round of funding, and a definite target area of improvement for Mojo Motors is making its product more mobile-friendly. Harman said that the company recognizes there is great opportunity on the mobile side of things, and that they’re already seeing a decent amount of traffic to the site from mobile devices.
Mojo Motors’ plan to help used car dealerships reach an audience that may not have been accessible via classifieds, print ads and traditional online marketplaces seems to have struck a chord, with over 25,000 members signed up already in the company’s initial test market. A key ingredient to its success is the way it’s been able to translate pricing and other sales incentives into a web-based platform; it’ll be interesting to see if that formula resonates as well with the larger U.S. market as it has in New England.