Online used car marketplace Motorway saw its losses more than triple in 2022, its annual report shows, as the firm discovered a £1.3 million ‘error’ in its previous accounts.
The London-based business saw a 237% rise in its pre-tax losses to £43.4 million, greater than its total sales for the year which stood at £41.2 million. Motorway put the losses down to increased costs associated with recruiting more staff and a splurge on marketing spend to “increase brand awareness and engagement from sellers and dealers on the platform.”
Motorway also said it had discovered an ‘error’ in in its 2021 accounts after failing to record the costs of share-based payments made to staff, which increased expenses by £1.3 million. Accountants PwC said Motorway’s restated figures for 2021 were unaudited as a result of the change.
Motorway rival Cazoo last year laid off as many as 1500 staff and withdrew from several European markets as CEO Alex Chesterman blamed a “perfect storm” of “rising inflation and interest rates with supply chain issues caused by the pandemic and war [which] has driven up the cost of living and hit consumer confidence." Chesterman also controls a stake in Motorway.
Motorway was valued at over $1 billion in a 2021 funding round in which it raised $190 million, co-led by Index Ventures and ICONIQ Growth. Co-founders Tom Leathes, Harry Jones and Alex Battle each have a net worth of £46 million, according to the Evening Standard Tech Rich List.
In July, Motorway acquired vehicle provenance check provider Total Car Check for an undisclosed fee. Total Car Check owners received over one million shares in Motorway as part of the deal, a stake which is thought to be worth just under £10 million.
