In 2009, Autoquake.com was flying high and seemingly had the used car world at their feet. They had over 120 employees, and had just received the best dealer website from AM and the ‘Internet award’ from the Fleet world magazine. Today, the story is tragically different different, on the 17th March 2011, Autoquake filed for administration. Where did it all go wrong?
Who are Autoquake?
Described on their website as the UK’s largest online used car supermarket, Autoquake operated within the used car and car leasing market. Founded back in 2005, the company was funded by Accel Partners and Highland Capital partners. The sales figures for 2008 showed that Autoquake had sold roughly 5,000 used cars, and, by the beginning of 2009 their website had received the 3rd most hits of any used car website in the United Kingdom.
There has been a lot of speculation in the press surrounding the demise of Autoquake. The website currently remains operational, there is however a large message at the top of the home page informing potential buyers that the company is in administration and that the website remains active purely for informative purposes; no reservations or deposits are being taken for any of the vehicles listed on the site.
Company CEO Dermot Halpin discussed the downfall of the business with the media on the 25th March, explaining that the company had gone under due to “financing issues”.
He went onto say that the original site owners had no idea that Autoquake would become so successful in such a short space of time; this did them no favours in the long run. The final nail in the coffin came as two deals that Autoquake were involved in fell through; Halpin said: “’We were in two deals – one buying something and the other was that we were merging with something. We were hedging our bets and that can fall apart very quickly. One of the deals fell apart and the financier said that the risk of giving us the bridging loan was too high and so we didn’t get it. Game over.’
Halpin finished the meeting with a sense of humour. He joked; “Just as we were sending out the administration notice, we were notified by Hitwise that we had won an award – we were in the top five online in 2010.”
All may not be lost for Autoquake; rumours were circulating that retail giant Tesco may acquire Autoquake, as they where looking to get into the used car market. It appears for now that Tesco will not be the saviors they are looking for, having already made their entrance into the used car market over the weekend. Perhaps however, someone else out there will be able to throw them a lifeline. Autoquake has a large customer base, which would be a big incentive to any potential buyer.