BURLINGAME, Calif. & LAS VEGAS -
Several industry veterans from companies such as eBay Motors, Jumpstart Automotive and Yahoo Autos have joined together to launch a new online interface called CarWoo. The new platform is designed to bring shoppers and dealers together.
 
How does it work? The program allows buyers to describe the vehicle they are looking to purchase and then dealers have a chance to respond and make offers, as well as communicate with the shoppers.
 
Officials say the new interface is not a broker and is not directly involved in the deal. It was created simply to facilitate communication between shoppers and sellers. Once a dealer makes an offer, he can see what other dealers are offering as well. Dealers can compete against each other to win the shopper’s business. Dealers are not charged if they choose to participate.
 
Some of the industry veterans behind the new service include Rob Chesney, former vice president and general manager for eBay Motors; Dillon McDonald, former chief operating officer for Jumpstart Automotive; Tom Taira, chief executive officer and founder of Honk.com, as well as co-founder of Zag and Truecar; Jeff Fluhr, founder and former CEO of StubHub; Tim Weaver, vice president of sales at ResponseLogix; Niall Hay, e-commerce director for a major automotive group; and Michael Yang, former vice president and general manager of Yahoo Autos.
 
According to these executives,  80 percent of CarWoo consumers are in-market shoppers who purchase vehicles.
 
“The Internet has completely changed the way dealers need to operate. Internet buyers are savvy, and they do their research and shop at multiple dealerships, often without going into the stores. Dealers are handicapped because they don’t know what the buyer knows,” explained Tommy McClung, CEO and co-founder of CarWoo.
 

“The current third party lead system just exacerbates the issues facing dealers,” McClung went on to say. “Dealers pay for these leads knowing that they are being multi-sold and for the most part, the leads do not convert to sales. This results in an extremely frustrating process.”

CarWoo pointed out that it can provide dealers with accurate, real-time market pricing data.

However, executives believe price is rarely the deciding factor for CarWoo buyers. They contend buyers often accept an offer that is not the lowest price, but rather tend to make selections based on online interaction, responsiveness of the dealer and more.

“Buyers make their selections based on many factors, including ‘the fit’ of the vehicle relative to their specific requirements, online interaction and responsiveness of the dealer, and occasionally, proximity of dealer and price,” site executives insisted.

Program organizers believe dealers won’t have to waste their money, time and energy on leads that sometimes don’t result in a sale.

“Dealers have been burdened with an out-dated system that doesn’t work any better for them than it does for the buyer,” declared Erik Landerholm, chief technology officer and co-founder of CarWoo.

“CarWoo makes the entire process open and transparent so both dealers and buyers know exactly what other offers come in, eliminating the guessing and cumbersome negotiating neither side likes,” Landerholm added.

Growing Dealer Network

CarWoo said it has more than 3,000 active dealers nationwide with plans for continued growth.

A manager at a California franchise dealership shared his experiences with CarWoo.

“I have an Internet sales team that absolutely uses CarWoo as much as they can. CarWoo is one of the best online solutions for car dealers that has come along,” stated Noel Graham, Internet sales manager at North Hollywood Toyota.

“The quality of the buyers that CarWoo delivers is second to none. The dealer interface is easy.  This is just an outstanding solution,” Graham added.

CarWoo also shared feedback from a pair of companies, including partner Vehix.com

“Over 80 percent of consumers use the Internet to help them with their new-car shopping process, and there is no shortage of auto-related information online. However, most third party automotive sites have failed to help the consumer during the negotiation process,” stated Derek Mattsson, CEO Vehix.com.

“CarWoo brings this missing component to the puzzle, which is why Vehix is excited to be their partner,” Mattsson added.

Moreover, Dennis Galbraith, of RevenueGuru.com and former Cars.com executive, pointed out, "CarWoo delivers to dealers an opportunity to submit offers to real buyers at no cost to the dealer. This is an extraordinary value proposition. After careful review of the facts and data, it can now be concluded that the best traffic for new vehicles comes from CarWoo, a source dealers cannot purchase and absolutely must understand."

Financial Backing

In relation to the development of the company, CarWoo officials announced they closed Series A financing this week. They said total funding received to date exceeds $6 million.

The round was led by Interwest Partners with participation by Comcast Interactive Capital, Blumberg Capital, Accelerator Ventures, Raymond Tonsing and Dillon McDonald. 

“In CarWoo, we see an innovative company that is effectively addressing a critical need for a very large market,” noted Doug Pepper, general partner at Interwest.

“We are excited that this financing will accelerate the rapid growth already being executed at CarWoo,” Pepper added.

Landerholm elaborated about how this financial support should allow CarWoo to take off as a dealer resource.

“Emerging from stealth operations with our launch and with this funding allows CarWoo to really begin serving a community of 12 million new-car buyers a year and 20,000 new-car dealers while we continue to enhance and expand the CarWoo service,” Landerholm said.

How Do Shoppers Get Started?

Consumers basically have two plans to select from, which allows them to negotiate anonymously with dealers via www.carwoo.com. Officials said these options will also be coming soon to the company’s online partners.

CarWoo was founded in 2009 by serial entrepreneurs, including McClung, Landerholm and Michael Young. The company garnered early funding from Y Combinator. CarWoo is based in Burlingame, Calif., and can be found on Facebook and Twitter at twitter.com/carwoo.