The co-founder and chief executive of used car marketplace Motorway has opened up about how he helped to build a $1bn empire from scratch following the biggest failure of his career.
On an up-coming episode of City AM’s Boardroom Uncovered show, Tom Leathes also revealed how he and his fellow founders landed on the car industry for their next attempt to hit the jackpot.
Leathes’ first start-up was Acre, a sustainability and safety recruitment firm which he then followed up with LoanCube which focused on generating leads for secured loans and life insurance.
He also helped set up Official Space, an office space aggregator before launching Top10, a hotel recommendation app, which was shut down in 2015.
‘Maybe we’re not not cut out for this’
Asked how he and his fellow founders went from a company failing to setting up Motorway, Leathes said: “I’d like to tell you it was a single light bulb moment where it all came together. It was very much not that.
“I started the company with my co-founders, Harry [Jones] and Alex [Buttle], and we’ve been working together for about 20 years. This is our fifth start-up.
“We’ve pretty much been trying to build companies since we were very young, pretty much since we finished university.
“Three [of our start-ups] were moderately successful and we had successful exits.
“One of them was a very big failure, which in fact was the one just before Motorway – which is very painful for us.
“We learned a huge amount of lessons through both the businesses that went well, but also that one that didn’t.
“We came off the back of a start-up that didn’t work. We had to close down the company, and that was really painful.
“We all took some time out and thought maybe we should go and get a job, and maybe we’re not cut out for this.
“But we very quickly realised that you win some, you lose some and we need to really learn from those lessons and take it into what we do next.
“We spent about six months in an office, just the three of us, working through ideas and trying to decide what to build next.
Wanting Motorway to ‘smash the incumbents’
Motorway is now worth $1bn and is backed by the likes of Index Ventures, Iconiq, Marchmont Ventures, LocalGlobe and BMW I Ventures.
In October 2024, City AM reported that Motorway had cut its pre-tax loss in 2023 as the Six Nations TV coverage sponsor handled more than £2.2bn in sales transactions in the year.
The London-based business, which has a network of more than 7,000 car dealers, reported a pre-tax loss of £31.7m for its latest financial year, down from the £43.2m loss it incurred in 2022.
The firm, which sponsored ITV’s coverage of the Six Nations this year, also saw its revenue grow from £41.1m to £60.9m in the 12 months.
In the up-coming episode of Boardroom Uncovered, the boss of Motorway also opened up about why he and his fellow founders ended up choosing the car industry for their next start-up attempt.
Leathes said: “We wanted to build a company that would hopefully be a 20 or 30-year journey and not something we just did for a few years but also something where the model was sufficiently impactful for its customers that you’d be able to smash the incumbents in a really big market.
“There’s not that many of those ideas left because obviously that’s what everyone’s looking for.
“But that’s why the car industry was just so interesting for us and we spent a lot of time looking at it and trying to unpick why it is such a difficult sector for people to transact in.
“So about six months after we first got the offices we put the first website live, which was very straightforward, it just gave you an instant valuation for your car.
“Then one of me, Harry or Alex would call the seller and chat to them about the vehicle.
“They’d WhatsApp us photos of the car and then we would cold call car dealers around the country trying to find a home for it. Through that process, first of all, we had to learn a lot about cars.
“On our first phone calls with car dealers – I’m glad they’re not recorded but we definitely learned a huge amount.
“Basically through that learning of just talking to customers, putting deals together, getting amazing outcomes for people, that informed us to build the product that is ultimately become Motorway.
“Often these things look like it’s an overnight success. It’s very much the opposite of that.
“We had 20 years of building start-ups, making mistakes and learning from them.”
