Dtec Ventures backed Algodriven offers a complete vehicle appraisal solution giving car dealers confidence to make competitive trade-in offers. Founders Glenn Harwood and Jaron Crossland tells more on the article from EntrepreneurME:
Buying a used car in the UAE has often been likened to walking through a minefield, with the process of having to assess a car’s capabilities often causing mental dilemmas like no other. One startup is hoping to make buying a used vehicle easier by streamlining the process of assessment and evaluation before a purchase with the help of its proprietary vehicle data platform.
Co-founders Glenn Harwood and Jaron Crossland initially built AlgoDriven after growing frustrated at the process of evaluating used cars. “We decided to build a mobile app to help car dealers with this problem- valuing used cars they wish to purchase or trade-in,” says Harwood. “That evolved from there, as we found that banks, insurance, fleet, and classifieds all face a similar problem.” The duo both have extensive experience in the automotive industry- Crossland’s family has owned car dealerships for generations and has run dealerships brands like Mercedes-Benz, Mazda, Chrysler, Jeep and Kia, while Harwood has had stints with Mercedes-Benz in Australia and Abu Dhabi, as well as BMW in Dubai.
Having launched in mid-2017, AlgoDriven’s core product is the EvalExpert mobile app, which car dealerships use to evaluate used cars to purchase or trade-in against new ones. “It streamlines the whole process from start to finish, giving them the confidence to make competitive trade-in offers,” Harwood says. “This allows them to sell more cars, and the consumer ultimately benefits from competitive trade-in prices.” Using its proprietary vehicle data platform, AlgoDriven offers a complete vehicle appraisal solution, consisting of a mobile app, a desktop dashboard, integrations to existing software, and website plugins.
AlgoDriven’s enterprise products also identify a car’s factory vehicle identification number (VIN), whether it’s in the country of its original registration, outstanding recalls for issues such as faulty airbags, as well as the date of first vehicle registration. It follows a vehicle pricing method based on data from a car’s VIN, macro and market factors (and even seasonal events such as Ramadan), and depreciation curves. According to the AlgoDriven website, there’s also a DriveExpert feature coming up, which will allow users to manage a dealership’s test drive process to give insights, analytics, and data to convert more drives into sales. The startup’s products are built specifically for the GCC market, plus Australia and New Zealand, with China and Hong Kong next on its list.
It’s an ambitious list of features, and as with any startup, acquiring the first customer was a pivotal and rather difficult step for AlgoDriven as well. Harwood and Crossland leaned on their personal networks to get their first few customers, and they made a conscious decision to invest in the product first, rather than in marketing. “We believe an amazing product will lead to customers who are raving fans, and they will do our marketing for us.” The bet paid off, as once the startup got a handful of customers, it began to snowball from there, and their philosophy, as Harwood puts it, has proven to be right so far. This response was also the affirmation the duo needed that it was a viable business.
“Once we started to get 5-10 customers who started giving really positive feedback and referring more customers, then we knew we were onto something, and we went all in.” When asked on how they feel they fare in contrast to their competitors, Harwood explains it’s their experience that gives them distinct insights to solving problems around automotive data. “It’s these insights, which have allowed us to build user-centric, easy to use mobile apps for our customers,” says Harwood. “We’re also obsessive about accuracy and quality- ensuring that we produce the best possible products for our clients, and build in feedback loops that we can keep improving. Finally, we’re tackling this problem on a global scale, starting in the MENA region.”
As the startup develops region-specific products, Harwood asserts they focus on the differences between the markets they cater to (GCC, Australia, and New Zealand), as they scale and explore international markets in the future. On a basic level, they take in differences in the vehicle themselves and terminologies, which they localize on both the app, as well as on all the sales and marketing materials. Next, they consider differences in the process of how car dealerships sell cars in the region. “We’ve been careful to accommodate these differences in both the look and feel of the app, as well as the process flow. This is one area where our experience working in [these] markets has given us an advantage.”
At the same time, the co-founders call themselves lucky for having been able to grow their startup through word of mouth. “We’ve found that by investing in an exceptional product and service that our customers love, they continue to refer more customers,” says Harwood, adding that they’re continuing this focus as they scale regionally and globally, along with a small sales team to help provide the similar personalized, face-to-face service the startup is now known for. Their strategy seems to be working as Harwood says that AlgoDrive’s product is now used in over 300 showrooms in markets where they operate, with it helping clients evaluate “tens of thousands of cars per month.” They’ve accumulated customers consisting of single-used car showrooms, franchised dealers, dealer groups, rental leasing and fleet companies, vehicle wholesalers, finance brokers and vehicle brokers, alongside car dealerships representing major players like BMW, Mercedes-Benz, Toyota, Lexus and Nissan.
As for its business model, AlgoDriven is essentially a SaaS platform, wherein car showrooms pay monthly access fees to use the product. With all of its tech developed in-house so far, the startup is continuing to re-invest heavily in building new features and products. It has bootstrapped its growth to date, choosing to stay lean and reinvesting revenues, while also joining Oman Technology Fund’s Wadi Accelerator, which also counts as being AlgoDriven’s first investor.
It also recently raised US$625,000 from Oman Technology Fund, Dtec Ventures, 500 Startups through its MENA-based 500 Falcons Fund, and Silicon Valley-based Social Capital. With the help of their new regional and international investors, the co-founders now hope to learn from their expertise, and open up new market potential and partnership opportunities in the future. The startup is also in the process of rolling “exciting new features” in its mobile apps, and “new data points in our API products to add even more value to our products and customer’s businesses.” They’re also boosting sales and marketing in MENA, and plus looking for other geographic markets to expand to in 2020.
When it comes to raising funds, Harwood advises fellow entrepreneurs to, “be passionate about what you’re doing, know your business and its metrics inside and out, and make sure you have a well-polished, short, succinct and compelling story to your pitch.” Much like other startups, the AlgoDriven cofounders have also faced the frustrations of building a team, and in particular, giving them the framework, processes and support they need to thrive. This is when, Harwood says, it’s good to have mentors on hand you can call and get advice from, as they’ve sure to have been in similar situations as well.
As the co-founders reflect on their startup’s journey, one recurring lesson they’ve realized is the importance of good relationships in business. “It’s easy, especially for a tech startup, to get caught up in product and code, and become disconnected from customers and other stakeholders,” says Harwood. “When we reflect on our journey, we realize the importance of these relationships with all stakeholders in our business- whether that be customers, team members, suppliers, partners, or investors.”