Cinch has grown to be the largest online business-to-consumer used-car marketplace in the United Kingdom within less than three years of its founding. Rivaling the established online car retailer ‘Cazoo’, Cinch is now looking for a global expansion after a successful funding round in 2021.
Though the company’s exponential growth in a short period is astonishing, the parent company behind Cinch’s success is a veteran in the used-car marketplace. To say the least, the founder and owner of Cinch have been in the business for more than 75 years.
The private equity firm TDR Capital acquired Cinch’s owner Constellation Automotive Group Limited for £2 billion in 2019.
Cinch is owned by Constellation Automotive Group Ltd, a subsidiary of the TDR Capital private equity firm
The Surrey-based Constellation Automotive Group Limited, known for being the “largest vertically integrated digital used-car marketplace in Europe”, owns Cinch among many other leading digital brands.
Constellation Automotive Group, formerly known as BCA (British Car Auctions) Marketplace, became a subsidiary of the private equity firm TDR Capital after it was acquired by the said firm for £2 billion on June 26, 2019.
Cinch was initially developed and launched by BCA on July 16, 2019, to work in partnership with one of its branches WeBuyAnyCar.com. At the announcement of the launch, the divisional CEO of Cinch, Jonny Crowe, said:
“Every element of cinch has been built in direct response to what the dealers and consumers have told us they want from the car finding, buying, and selling process. Consumers want more intuitive offerings, and dealers [are] under increasing financial and operational pressures to convert consumer leads; we want to help.”
Cinch’s founder and owner BCA Marketplace rebranded itself as Constellation Automotive Group in 2020
On October 26, 2020, less than a year after the acquisition and the launch of Cinch, reports emerged that BCA Marketplace had filed for a name change to Constellation Automotive Group Limited.
Though the discreet name change at the time was not picked up by the press, it indicated TDR Capital’s rebranding approach for the acquired car company.
According to the 2021 company report covered by Technology Magazine, Cinch falls under the ‘Business-to-Consumer’ division of Constellation Automotive which supplies used cars to the consumer market.
The report further stated that the rebranding of BCA to Constellation Automotive Group was implemented with the motive of encompassing all the divisions and brands into a single recognizable brand. The Chief Information Officer of the Group, Robert Teagle, explained:
“It’s to make a clear recognition that the group is made up of a number of market-leading brands beneath it, as well as allowing for our future growth.”
Cinch raised £1 billion in private capital following a successful institutional funding round in May 2021
At the beginning of 2021, Cinch geared up for a funding round ballparked at £500 million. Analysts determined that if the company’s ambitious funding was to be successful, Cinch was standing to be valued at £5 billion despite being a relatively new company.
The funding held on May 20, 2021, exceeded expectations and raised more than £1 billion in private capital from investors around the world. Notable investors were the Soros Fund Management, Neuberger Berman, and sovereign wealth funds of Abu Dhabi and Singapore.
“This funding round demonstrates the scale of the opportunity ahead of us and allows us to turbocharge our business model and geographical reach in one of the most exciting and fastest-growing retail markets in the world,” said Avril Palmer-Baunack, the executive chairman of Constellation Automotive Group.
Moreover, the fundraising round was labeled by Sky News as one of the “largest-ever private equity injections into a UK-based company”.
