The online car retailer Clutch, which commenced operations in Halifax in 2017, has secured Real Ventures as the chief investor in a seed round that brought in $7-million.
Clutch has sold more than a thousand used vehicles in Halifax in three years, using a model of offering customers an entirely online car buying experience, including financing and insurance, and at-home delivery and test drives.
Apart from Real Ventures, other investors include Global Founders Capital, BrandProject, FJ Labs and Azure Capital Partners.
Clutch employs 17 people in Halifax, which is about half its work force.
“Halifax for us was the starting point, and for a lot of reasons is the leadership market for us,” CEO Dan Park said from Toronto on Friday. “They’re further ahead than our Toronto market, so we point to Halifax for leadership around our business and what it could look like in the future. We’re going to continue to invest there. The customer base has resonated well with our product, folks in Halifax want a better way to buy a car, and we’re providing that.”
Clutch’s inventory in Halifax includes almost two hundred cars, stored in a warehouse. The company says not investing in a physical dealership allows it to offer lower prices.
“We certainly allow folks to come and view the cars and test drive the cars at our site, but we also offer an at-home test drive model, so we’ll bring the car directly to you,” said Park. “We encourage folks to buy online, we offer a seven-day money back guarantee so people can have peace of mind when they buy the car. Post-COVID, a lot of customers will go online and purchase a car without having seen it in person, and we’ll drop it right in their driveway.”
Park, who formerly ran Uber Eats Canada, told industry publication BetaKit the new funding will help the company grow operations in Toronto and expand to other markets.
He said Friday there will also be more jobs in Halifax.
“Halifax was a very open market when it came to regulations around car selling, so it was the easiest place to launch when the company started,” he said. “It was a great place to start, because it took off pretty quickly and we’re taking what we’ve learned there and applying it to the Toronto market.”