Billion-Dollar Babies: Clutch reinvents Canada’s used car market
October 5, 2022
Clutch CEO Dan Park
On June 15, the Communitech accelerator in Kitchener, Ontario unveiled its Team True North initiative, to identify, promote and support Canada’s top-performing tech companies.
Communitech identified an initial cohort of 35 Canadian firms that it expects, based on objective data, to have the highest probability of reaching $1 billion in annual revenue by 2030.
Research Money has launched a series, which we’ve called “Billion-Dollar Babies,” to profile some of these top performers, featuring interviews by our writing team with the companies’ CEOs and founders.
This profile focuses on Clutch, a Toronto-based company that is revolutionizing Canada’s used-car market.
When founded: 2016
Where located: Corporate headquarters in Toronto, with other offices, warehouses, and retail facilities in British Columbia, Alberta, Saskatchewan, Ontario and Nova Scotia
Number of employees: 250 employees across Canada
Core business: Online used car sales
Financial backing (venture or private): Venture funded by private investors
Clutch is an online used car sales company that provides an alternative to dealerships and online sites, such as Kijiji or Facebook Marketplace.
According to its website: “Clutch offers a seamless, transparent, and hassle-free car-buying experience from the comfort of your home — with a broad selection of high-quality used cars, delivery to your door in a matter of days and a 10-Day Money-Back Guarantee.”
Clutch sources its cars from a variety of locations, including auctions, trade-ins, partnered manufacturers, and customers who sell their car to Clutch. All of their cars undergo a comprehensive inspection and reconditioning process, and are covered under their free 90-Day Protection Plan. Clutch also offers financing and extended warranty packages.
Headquartered in Toronto, Clutch serves markets in British Columbia, Alberta, Saskatchewan, Ontario, Nova Scotia, New Brunswick and Prince Edward Island. The company is backed by a number of investors, including Canaan, BrandProject, Real Ventures, D1 Capital, Upper90, FJ Labs, Global Founders Capital, and Azure Capital Partners.
Research Money interviewed Dan Park, CEO of Clutch.
Why do you think Communitech chose your company to include in its list of Canada’s highest-potential tech companies?
The automotive retail industry is enormous, but up until the launch of Clutch, the only options shoppers had were to either purchase from a dealership or through risky online marketplace sellers. We’ve been successful in revolutionizing the automotive retail industry in Canada, creating a reliable solution for car buying and selling, using a model that has the potential to experience tremendous growth.
Since our launch, we’ve expanded to seven new markets, secured both our Series A ($20M CAD) and Series B ($100M CAD) funding rounds. This has allowed us to build our team, strengthen our operations across our markets, and ultimately continue accelerating our growth while remaining fiscally responsible.
How close is your company to reaching $1 billion in revenue?
We’d like to reach $1 billion in revenue as fast as possible, while continuing to focus on fundamental business metrics.
What does your company do that’s unique and innovative?
We’re the first automotive retailer in the country to embrace an entirely digital customer-first experience with our e-commerce platform that buys and sells pre-owned, certified vehicles. By visiting Clutch.ca, customers can browse a selection of high-quality vehicles at competitive prices and access an end-to-end online purchase experience, which includes financing, insurance and seamless home delivery.
We give our customers complete peace of mind, by backing our cars with a 10-day Money-Back Guarantee. We’ve also recently launched a seamless car-selling experience for Canadians, with our Instant Cash Offer Tool that allows customers to receive an instant offer after submitting basic details about their vehicle online.
Would you like your company to stay in Canada as it scales up?
There is a huge total addressable market in Canada, so this remains our focus. We have a goal to service 90 percent of Canadians by the end of 2023.
Tell me about your commitment to sustainability.
While our mission is to deliver a modern car-buying experience, we also recognize that we have a responsibility to operate sustainably. Since May 2020, we’ve partnered with Tree Canada, and through this partnership we’ve been able to plant three trees for every car sold. To-date, we have planted over 10,000 trees.
We also know that driving used cars is much better for the environment than new cars, which is why every car listed on Clutch.ca goes through rigorous inspections and repairs to help sustain its lifecycle. We’re also seeing our inventory of used hybrids and electric vehicles (EVs) grow. We look forward to exploring more partnerships in this space and becoming a leader in used EV sales in the country.
What sort of support are you expecting from Communitech, since they now have you on their Team True North list?
We’re looking forward to being a part of a network of Canadian tech leaders who are eager to support each other, share feedback and learnings, and ultimately celebrate each other as we continue to scale.