eBay acquires Caramel to reduce risk and complexity of online car sales

E-commerce giant eBay announced plans to purchase Caramela startup that helps car sellers and buyers complete the final stages of a transaction, including inspection, financing, paperwork, title transfer, insurance and more.

As eBay has grown over the years, it has had to evolve to remain competitive – for example, last year the company UK seller fees removed to counter the new wave of market startups. In the automotive space in particular, eBay has acquired several startups to stay ahead of the curve, including advertising and marketing technology company Cargigiand also British classifieds site Motors.co.uk.

Last month, eBay’s old foe Amazon also entered the online car sales market with launch of Amazon Autos in partnership with Hyundai. While it’s all about finding and purchasing new cars directly from dealers, it’s possible that Amazon could expand its reach to include used cars in the future.

Ultimately, eBay wants it to remain the premier channel for selling used cars safely and quickly at a time when consumers have more options than ever.

Caramel, founded in Los Angeles in 2021, formally launched last year, receiving nearly $19 million in funding from donors including FJ LabsHearst Ventures, Zeev Ventures and Primera Capital.

Caramel can be used to complete sales initiated through independent dealerships or marketplaces. including eBay. At checkout, Caramel is provided as an option to verify people’s identities, process title transfers and registrations, and transfer funds. Buyers can also select financing options and arrange for vehicle delivery.

Although eBay already offers some management and services to facilitate online car sales, such as escrow for storing fundsbringing Caramel on board will speed up the process by taking on much of the stressful post-sales administrative work.

But more than that, Chris Prillgeneral manager of eBay Motors, says the acquisition aims to “build trust” in the car buying process, helping buyers and sellers avoid fraud.

Neither company disclosed the acquisition price, but eBay said it expects the deal to close in the first quarter of 2025.