Spanish Car Subscription Startup Revel Raises $123M for Expansion

The car sales market has faced challenges in recent years due to economic conditions and evolving consumer preferences, including the rise of ride-hailing apps and alternative transportation options. Spanish startup Revel is addressing this shift by offering a digital car “subscription” service, securing €115 million ($123 million) in funding to expand its flexible lease agreement model, which includes insurance and maintenance. This service is aimed at consumers willing to commit for at least a year, providing a faster, more convenient, and flexible alternative to traditional leasing providers.

Revel’s approach is innovative, but its sourcing and business model remain undisclosed, with CEO Enrique de Mateo guarding the details. However, the company’s structured financing tranche of €100 million suggests some form of leasing arrangement with suppliers.

Revel’s potential lies in targeting consumers who want to have their own cars without the commitment of ownership, especially as cars become more advanced and autonomous vehicles emerge. While ride-hailing services may become more popular, leasing could be a primary way for individuals to access state-of-the-art cars.

The funding comprises €100 million in structured financing to expand the car network and €15 million in equity investment from investors like KKR and Santander Consumer Finance. Revel, founded in 2020, has learned from previous startup failures in the leasing market and aims to build a sustainable model for car subscriptions. The startup’s focus on one-year leases in its home market of Spain has resonated with consumers, offering an economically appealing alternative to longer-term leases.

Revel’s subscription model, which includes insurance, maintenance, and carbon offsetting, can be accessed online or through an app, providing a hassle-free alternative to traditional car ownership.