Montréal-based Kiwiz has raised $600,000 CAD in pre-seed funding for its platform that connects auto inspectors to prospective car buyers and brings inspections out of repair shops and to the point-of-sale.
Kiwiz was initially founded in 2020 as CAR2SELL, a platform that targeted sellers. Following a pivot and rebrand, Kiwiz is now looking to address what the company perceives as a lack of confidence and transparency in the car buying process.
Kiwiz completed 600 inspections in 2022 and anticipates over 3,000 inspections in 2023
The convertible note round officially closed at the end of August and saw participation from investors Stéphane St-Hilaire, former president of car auction site Adesa, André-Martin Hobbs, founder of auto-financing platform DecisioningIT, and Benjamin Tuff, partner at consulting firm Benjamin David Group.
In an interview with BetaKit, Kiwiz co-founder and COO Adélaïde Favé said some of the startup’s investors started out as mentors for the business and were interested in participating when they learned Kiwiz was looking to raise money. All three of the aforementioned investors are now advisors for Kiwiz.
CAR2SELL was founded in 2020 by CEO and co-founder Edouard Schaeffer and Favé. The service helped private sellers complete their sales from listing the vehicle, cleaning it, and providing an inspection. During their time operating CAR2SELL, the duo noticed that sellers wanted additional assistance with buying new vehicles after selling their old vehicles.
“We had a lot of (car) buyers that wanted to be accompanied by CAR2SELL after we had just helped them sell their car,” Favé said. “So we helped them, and we found it was more in line with our values and what we wanted to bring to the industry.”
Seeing a market opportunity to address the time it takes to schedule an appointment and bring a car to a repair shop, the founders launched the Kiwiz platform in 2022 to connect buyers with a certified inspector that can inspect at the point-of-sale without buyers needing to be present.
Favé said the company is specifically targeting risk-averse private buyers, vehicle auction houses, insurance companies, and rental companies. According to a statement by Kiwiz, the company completed 600 inspections in 2022 and anticipates over 3,000 inspections in 2023.
One concern Favé said Kiwiz is looking to address in the buyer’s market is rolled-back odometers. She claimed that one in five cars has a rolled-back odometer, meaning someone has tampered with the gauge that indicates how many kilometers a vehicle has been driven to make it appear less used, which is difficult to determine without an expert.
Kiwiz also hopes to address what Favé described as a shortage of qualified mechanics, which has made it difficult and time-consuming to book appointments at repair shops. This is particularly true in Québec, she added, where tighter immigration quotas have led to fewer qualified mechanics coming into the country, while fewer Canadians are willing to work such a physically demanding job.
Favé described how those hurdles work in Kiwiz’s favour, as the platform provides more flexibility and less physically demanding work, which could attract qualified mechanics to work as inspectors rather than in a traditional mechanic shop.
“It’s a really painful job. We have some inspectors that are 50 years old, they have back pains,” she said. “They still want to be in the automotive industry because they are car enthusiasts.”
Purchasing a car has been difficult since the pandemic sent the market into a tailspin in 2020, shutting down factories and lowering demand, leading to a surge in prices and wait times.The demand for electric vehicles is part of what keeps prices so high, according to Charles Bernard, an economist with CADA, as quoted in a June CBC article analyzing the car market.
“Dealers can also charge basically whatever they want for EVs, [Bernard] said, because consumer demand is there, even if you ask them to wait,” the article said.
Favé’s personal market observations line up with this. She noted that sellers are offloading their traditional vehicles to switch to electric ones, which Kiwiz also helps inspect. She added that sellers are seeking cars with more affordable payments, while others are choosing to maintain their existing vehicle in excellent condition, hoping they won’t have to purchase a new one in the near future.
Favé said Kiwiz’s pre-seed funding will go towards new platform developments, including API integrations, billing, and dynamic inspection processes to alert inspectors to look out for specific issues with certain makes and models through the platform.