E-commerce giant eBay has announced plans to acquire Caramel, a startup that helps car sellers and buyers complete the final steps of the transaction — including verification, financing, paperwork, ownership transfer, insurance, and more.
Founded out of Los Angeles in 2021, Caramel formally launched last year with some $19 million in funding behind it, from backers including FJ Labs, Hearst Ventures, Zeev Ventures, and Primera Capital.
Caramel can be used to complete sales initiated through independent dealerships or marketplaces, including eBay. At the point of checking out, Caramel is provided as an option to verify the individuals’ identities, handle title transfer and registrations, and transfer funds. Buyers are also able to choose financing options, and arrange delivery of the vehicle.
‘Trusted’
As eBay has grown through the years, it has had to evolve to remain competitive — last year, for instance, the company removed seller fees in the U.K. to counter a new wave of marketplace startups. In the automotive realm, specifically, eBay has acquired several startups, including advertising and marketing tech company Cargigi, as well as U.K. classifieds site Motors.co.uk.
Last month, eBay’s old foe Amazon entered the online car sales business with the launch of Amazon Autos in partnership with Hyundai. While that is all about finding and buying new vehicles directly from the dealership, it isn’t entirely inconceivable that Amazon could expand its scope to cover used vehicles in the future.
Ultimately, eBay wants to ensure it remains a go-to channel for secure, speed used car sales, at a time when consumers have more options than ever.
While eBay already offers some guidance and services to ease online car sales, such as escrow for holding funds, bringing Caramel in-house gives will enable it to expedite the process by taking care of a huge chunk of the stressful post-sale administration.
Chris Prill, general manager at eBay Motors, says the acquisition is all about “creating trust” in the vehicle buying process, helping buyers and sellers avoid scams.
“Buying a car is a big moment — Caramel’s platform brings it all into one simple, seamless process: title and identity verification, insurance, financing – even shipping the car to the buyer after purchase,” Chris Prill said in a statement. “With Caramel and eBay combining forces, both buyers and sellers will be able to complete vehicle transactions on eBay with greater peace-of-mind, and Caramel can further establish itself across a myriad of platforms.”
Neither company revealed an acquisition price, but eBay said it expects the deal to close in Q1, 2025.
