Auto start-up Woom gets money, Mail.ru rethinks

18 Apr 2017

The Russian auto market remains in flux, as companies try to find new business models in a competitive and crisis-hit environment. However, this has not stopped funding going to new entrants, such as start-up Woom.

Woom was launched last December by Vasiliy Teplyakov, an executive from local auto dealerships BMW Rusland Trading and Marussia Motors. The company works on a principle of online auctions via dealerships, where users can buy or sell vehicles. The model is similar to that of existing Russian player CarPrice.ru, which has been quite successful in allowing users to find the best deals via dealers.

The start-up received a boost in funds in December, when the founder of investment company InMedia Evgeniy Zhulanov and business angel Dmitriy Sutormin invested $1 million U.S. in the project. At present, Woom works with 30 dealerships across 11 cities in Russia and plans to connect to another 200 dealers across 30 more cities. It hopes to process some 25,000 transactions in 2017, with turnover of around 100 million rubles ($1.8 million U.S.).

The start-up certainly faces an uphill battle in challenging CarPrice, which has already received some $40 million U.S. in funds from Baring Vostok and others. CarPrice offers car owners a free valuation service based on vehicle specifics, and provides the chance to sell their autos via a national network of dealers.

CarPrice.ru saw total monthly visits to its desktop and mobile sites of just below 500,000 in March, according to SimilarWeb, while the young start-up Woom generated less than 15,000.

Mail.Ru Group refocuses its classifieds on dealers

Russian internet major Mail.Ru Group decided that its primary auto classifieds project Cars.mail.ru will no longer compete against the more dominant players on the market, such as Auto.ru, Drom.ru, Yandex and Rambler. The company has gradually been redirecting its business from user-focused listings to a focus on dealers.

This repositioning recently culminated in the decision to remove the option to list vehicles from the site entirely. This left users with the ability to search for cars only from Mail.ru’s dealer inventory.

Mail.Ru Group’s press office put out the following statement explaining the move away from private user listings: “Initially, we focused on b-to-b clients, and listings by private users amounted only to a small proportion. The car market is becoming more ‘civilized’, as transactions between private users are shrinking, and used cars are sold to dealers more often. The dealers check the used cars, before putting them up for sale again.”

Cars.mail.ru still receives a sizable traffic share, with around 3.2 million visits in March, according to SimilarWeb. But, this is far behind the likes of market leaders Auto.ru (39.7 million) and Drom.ru (70.7 million). 

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Pavel Marceux

Pavel Marceux joined AIM Group in 2014 as a writer focusing on the Russian market. Following his MA at Edinburgh University, he worked in a number of countries, including Turkey and Japan. Pavel has honed his skills and knowledge at several publishing houses and consumer markets research firms. He is an experienced markets analyst, researcher and editor, who values accuracy, professionalism and honesty in his work above all else. His specialist focus is technology, economics and consumer trends. Splitting his lifestyle largely between London and Moscow, Pavel functions on a truly international platform.