The owner of Cinch, the digital used car platform, has secured £1bn of new equity funding as it vies to capture a big slice of the growing international market for online vehicle sales.

Sky News has learnt that Constellation Automotive Group will announce on Friday that it has raised £1bn from a group of blue-chip backers to fund Cinch’s expansion.

The raise is thought to be one of the largest-ever private equity injections into a UK-based company.

The investors are understood to include a number of US institutions and some of the world’s largest sovereign wealth funds, according to people close to the deal.

Analysts said the fundraising was likely to value Cinch at a level similar to that achieved by its British-based competitor, Cazoo, which recently agreed to list in New York as part of a $7bn merger with a special purpose acquisition company (SPAC).

Cinch’s capital-raise will be twice as large as it was originally targeting, reflecting investors’ appetite to plough money into a retail sector where digital sales remain comparatively low.

Auto1, a German-based rival, raised €1.8bn in a Frankfurt listing earlier this year, €750m of which was earmarked for investment into its consumer arm, Autohero.com.

In addition to Cinch, Constellation’s business-to-consumer division, the group operates the consumer-to-business platform Webuyanycar.com and the business-to-business service BCA Marketplace.

The new capital is expected to be used to fund Cinch’s expansion into a larger number of countries in the near term, insiders said.

Cinch has become a prominent consumer brand in the UK by advertising heavily and striking deals to sponsor the shirt-sleeves of players such as Tottenham Hotspur and England striker Harry Kane.

It has also agreed to replace Fever Tree as the title sponsor of the annual pre-Wimbledon tennis tournament at Queen’s Club.

The splurge in spending forms part of a race to reshape an industry which records €400bn (£343bn) in annual sales across Europe.

Cinch boasts the biggest supply of cars of any of the UK’s online marketplaces, with sources suggesting that sales had risen by 300% so far this year.

It has sold tens of thousands of vehicles since it launched last July, the sources added, and was seeing a run-rate of 30 million unique annual visitors.

Earlier this week, Cazoo said it had seen the number of vehicles sold during the period up 373% to nearly 10,000.

Constellation, which was then called BCA Marketplace, was taken private from the stock market by the private equity firm TDR Capital in June 2019 in a deal valuing the entire group at £1.9bn.

The surge in the value of its B2C arm since then will inevitably prompt speculation that a return to the public markets could be on the cards in the coming years.

The Cazoo and Cinch capital-raisings underline how rapidly the market for selling used cars is shifting.

Industry data suggests that just 1% of used-car sales are digital today, with analysts and investors arguing that the coronavirus pandemic has made the idea of buying a vehicle online much more acceptable to consumers.

A spokesman for Constellation declined to comment on Thursday.

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