How OneLot Became the Leading Used Car Dealer Financing Platform in the Philippines in Just 1 Year
If you've given up on public transportation but can't afford a brand-new vehicle just yet, buying second-hand is the way to go. The used car market in the Philippines is one of the fastest-growing in the world, with the looming challenges of public transportation, increasing disposable income, and large demand for used vehicles from middle-income groups. Small dealerships and family-run businesses account for about 90 percent of transactions; it’s a $ 8 billion industry that shows great promise but needs better support from financial institutions.
Recognizing a critical gap in used car financing, Harm-Julian Schumacher, Tommy Campos, and Subramaniam Srinivasan founded OneLot, a lending company that aims to address the lack of financing options for used car dealerships and solve challenges in the rapidly growing yet underserved market.
ALSO READ
A Groundbreaking Climate Resilience Technology Platform is Coming from DLSU, DOST, and DEVCON
Filipino Car-Sharing Startup Doon Raises P84.4 Million in Pre-Seed Funding Round
Right from the start, the founders prioritized understanding the pain points of their customers over automating processes from the get-go. They identified a massive unmet demand for credit in the Philippines, estimated by the Securities and Exchange Commission at more than $200 billion.
OneLot Founders (from left) Tommy Campos, Harm-Julian Schumacher, Subramaniam Srinivasan
The early days of OneLot involved conducting field visits and speaking with over 100 dealers to identify problems and validate solutions. The founders confirmed the lack of financing options and that a specialized lending platform could fill this gap. Schumacher leveraged the knowledge he gained from his family’s business in Germany, where banks actively supported car dealerships.
“Our first loan was manually processed,” reveals Schumacher in an interview with Esquire Philippines. Securing that first customer required a great deal of effort. The knowledge they gained from such experiences laid the foundation for the technology behind OneLot’s AI-driven underwriting process.
OneLot’s proprietary Loan Management System (LMS) is tailor-made for the used car industry. It is cost-efficient and scalable, and risk control measures are in place. The platform leverages AI for a seamless, end-to-end underwriting process that enables fast disbursement–within hours. The system is intricate enough to perform the following functions: dealer KYC (Know Your Customer) and risk assessment; loan evaluation and car financing; and loan management, including extensions and repayments. OneLot’s AI-powered approach has enabled the company to make faster, smarter loan decisions while decreasing risk.
For a loan to be approved, OneLot’s platform evaluates several factors, including dealer revenue and cash flow, risk assessment of the dealership and its key personnel, and valuation of assets.
OneLot provides loans to dealers, enabling them to expand inventory, increase revenue, and boost profits. “Our interest rates are more competitive than those of other lenders, with most SME lenders offering rates starting at 3.5 percent,” says Schumacher. Despite the competitive rates, OneLot still earns reasonably from the loans. The company says it recorded 10x revenue growth for the second quarter of 2024.
The business, however, is not without challenges. The founders had to ensure they developed the right products with efficient processes while maintaining the capacity to disburse funds rapidly. Following Paul Graham’s principle of ‘doing things that don’t scale,’ they soon built a deep understanding of customer needs—never mind if they had to refine their solutions manually at first.
Their efforts paid off and led to the development of world-class tech solutions, enabling them to scale and capture a bigger market share. Aside from the LMS, OneLot also has a Dealership Management System (DMS) that offers tools for managing car inventory, gaining insights into car prices, and marketing cars across multiple channels.
In less than a year, OneLot has become the leading used car dealer financing platform in the Philippines, issuing millions in loans annually. And in October 2024, the company announced that it has secured a $4 million pre-seed funding round led by 468 Capital, with participation from Kaya Founders, Crestone Venture Capital, 21yield, Founders Launchpad, and angel investors. The fresh funds will be used to accelerate the development of OneLot’s technology platform, with a strong focus on product and AI advancements.
