USD 37m in funding. This Youtube car influencer launched his own car marketplace to break away from the mother platform.
One of the biggest challenges digital content creators have is overcoming the financial dependence on the platforms through which you have built your reach. Do that and you’re well on your way to winning in the creator economy. By launching his own online marketplace used cars, US car youtuber Doug DeMuro may have found an impressive answer. Fresh off some USD 37m in newly acquired funding, we’re breaking down the success of “Cars & Bids” and how DeMuro cam up with the idea.
Creator Economy meets Car Dealership. And no, we don’t mean a paid appearance by a famous influencer at your local chop shop. We mean Youtubers’s increasing importance in the sales chain for selling new and used cars. In fact, Youtube is quickly becoming the first point of contact for potential buyers. In contrast to car salespeople at car dealerships, creators are free from the pressures of commission. And with their enormous reach, car manufacturers are also readily providing direct access to new products and spectacular special models.
In addition to star creators like Supercar Blondie, who focusses on the glitzy, dazzling sports cars and luxury models to her ten million followers, there is a very healthy and robust scene of car fans and experts devoted to more pragmatic, less spectacular models. Their detailed reviews perform just as well—no matter how critical they are or not. In Germany, for example, the shorts by Christopher Karatsonyi aka Car Maniac or the “The Car Crash Review” channel are just two examples of what works outside of the US.
Do something less beholden to the Youtube algorithm
Of course, the scale stateside dwarfs that of Europe. Doug DeMuro’s Youtube clips regularly reach millions within days of publishing. DeMuro stands out from the majority of car Youtubers, who seem content with their jobs, where the platform gives them a share of advertising revenue and flies them to new launches and driving events on car companies’ dime.
In mid-2020, DeMouro founded car auction platform Cars & Bids. ” I wanted to do something with my audience that was less beholden to the YouTube algorithm,” he is quoted in “Forbes” as saying. Success for what was originally intended to be a side hustle was immediate. The first day we received 900 submissions, and the guy who was reviewing all of them was just me. He had to scramble to hire writers and an auction support team.
Smart content strategy paves the way for success
Although DeMuro is modest about the immediate success, describing it as the simple “nature of a startup,” the truth is that there is a very shrewd content strategy responsible for kickstarting the marketplace’s success. Some of the vehicles listed on Cars & Bids have corresponding videos produced, which DeMuro plays on his YouTube channel and includes links the auction. Even an extremely unspectacular BMW 3 Series Touring, built in 1994, generated hundreds of thousands of views within the few days the campaign lasted. And of course the platform is linked under each of DeMuro’s clips, even under videos that released several years ago.
Another pillar to the success of Cars & Bids, where now two dozen cars a day are auctioned off—sometimes for sums in the 6-figure range—is the array of cars on offer. In addition to vintage cars, particularly sought-after collector vehicles such as a DeLorean with less than 3,000 miles on the odometer, special models just a few years old and brand-new electric cars are also traded. This mix has not only led to sales of USD 230m to date, but also to private equity firm The Chernin Group acquiring a majority stake in Cars & Bids for USD 37m, according to several media reports.
Highly engaged, passionate communities
Behind the investment firm is Peter Chernin, one of the best-known managers in the U.S. media and entertainment industry. He was COO of media conglomerate News Corporation and CEO of the Fox Group for 13 years. Furthermore, the 71-year-old is also a specialist in investments in creator companies. In 2016, Chernin Group acquired 51 percent of Barstool Sports. After selling some shares to gaming operator Penn National, Chernin Group still retains a 37-percent stake. Also in the portfolio is MeatEater, a hunting products brand that grew out of the Netflix series of the same name starring Steven Rinella.
In addition to the potential Chernin Group sees in the youngtimer segment, DeMuro won them over primarily because of the “highly engaged, passionate community” he has built, an executive with information on the deal told Forbes. Unlike traditional online marketplaces and Ebay Motors—the top player for auto auctions in the U.S.—the community at Cars & Bids is deeply integrated into the marketplace. There are verified profiles complete with sales and bidding history, as well as reputation ranking based on activities, such as comments. These are important functions for keeping heavy users and car collectors on the platform. But the key growth lever remains DeMuro itself.
Car dealer with three billion Youtube views
Auto marketplace Carwow was very quick to understand the potential of YouTube as a funnel for car sales. Based in the UK, Carwow veered off in the other direction DeMuro went. Launched in 2013, the platform launched a YouTube channel four years later, featuring host and Carwow’s Chief Content Officer Mat Watson presenting new car models. With 7.85 million subscribers and over three billion views since launch, Carwow’s Chanel is one of the largest car channels on Youtube anywhere on the planet.
Carwow declined to answer how many leads are generated for the marketplace via Youtube, but internal market studies do provide some telling insights. According to these documents, Youtube played a decisive role in increasing Carwow’s brand awareness in the UK from 23 percent to over 30 percent between early 2020 and early 2023. A spokesperson for Carwow did saw that they have been able to replicate this success in the Spanish market. By taking over and integrating the channel for car youtuber Juan Francisco Calero in the summer of 2020, they were able to almost double brand awareness from 15 percent before acquiring Calero. Carwow has also employed on an in-house creator in Germany for several months, which has led to some clips generating over 300,000 views, according to Carwow. As such, the company is quite bullish on the near-term. “In two to three years, we expect to see a similar impact on awareness through YouTube in England and Spain.”