How the start-up Autodoc makes billions with car spare parts

Podcast

Zero hour
How the start-up Autodoc makes billions with car spare parts

The cars on Europe’s roads are getting older and older, and more repairs are needed. CFO Lennart Schmidt explains how the Berlin-based car spare parts company Autodoc is benefiting from this and when it plans to go public.

CAPITAL: Autodoc makes its living by selling car spare parts online at cheaper prices than those charged in brick-and-mortar stores or workshops. This means that margins are reduced. Doesn’t that also make you enemies?
LENNART SCHMIDT: I think we have created a different way of accessing the end customer. Distributors have previously focused on workshops or garages. We have created direct access to facilities that want to install the parts themselves. This is also a completely different channel, even for the large distributors.

But this is unlikely to be met with approval everywhere in the workshops.
We work with them and offer them our parts too. They can also buy parts from us at a lower price. We have made a few friends there as well.

Cars are being used for longer and longer in Germany, and the downtime is increasing. Does that mean that the need for repairs is also increasing – something Autodoc was keen to do?
Yes. Cars are getting older in Europe, we are at an average of 12.5 years. And there are more than 250 million cars in Europe, which is a huge market for us. Customers start buying from us when the car is between four and five years old. But what really drives our business is something else: the main driver is that car parts are bought online. Autodoc opened up this market, and it is on this basis that we are growing the most.

How much room is there left?
At the moment, around ten percent of this trade is conducted online. In the fashion industry, it is already more than 30 percent. And that is where we can go in the long term, too.

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A company needs money to grow. Autodoc has long avoided outside investors. That has now changed; an American financial investor has joined the company. Why?
We have sold a minority share to the US investor Apollo. The advantage for us lies in a strategic component: They give us access to expert networks, for example on the issue of supply chains, financing or IT. Apollo brings in new ideas to further develop the company.

New ideas, that probably doesn’t relate to the sale of car parts?
Because we are certain, we have the greatest expertise. Nevertheless, we can discuss strategic decisions with Apollo and also have them questioned. They have built up a good level of know-how about the market. And of course it is also about expertise in the capital market.

So we’re talking about a possible IPO for Autodoc. There was already a first attempt in 2021. Now another one is to follow. What’s the situation?
As a management team, we are preparing the company for this step by step. There is no concrete process yet, but of course this is one of the next options for us. We are preparing for it, and when the market is ready, we are ready too.

What does that mean exactly?
The valuations, especially in the area of ​​platform technology and e-commerce, are not yet where we think they should be. We don’t need to push anything forward immediately. But we are preparing the company.

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