A leading online platform for digital auto sales and financing has scored a major cash infusion from investors and broadened its relationship with one of the world’s top auto finance companies as more dealers and consumers look to streamline the process and operate more efficiently.
San Francisco-based AutoFi announced Monday it closed an $85 million funding round boosting its total valuation at almost $700 million. AutoFi CEO and co-founder Kevin Singerman told Forbes.com that’s the biggest cash infusion in the company’s almost seven year history.
AutoFi is in the midst of a four-year streak of 100% revenue growth, doubling the size of its staff in 2021 to 220 employees, processing more than one million auto finance requests that resulted in more than $3 billion in vehicle sales last year, according to the company.
Singerman said he expects over the next two-year period AutoFi will triple its size as demand for its online finance and sales tools grows.
This latest injection of funding will not only help finance that growth, but Singerman said it will also provide AutoFi with “independence” as it deals with its many partners that include dealers, finance companies, automakers and customers.
“It allows us to focus on one thing and do it exceptionally well and because we’re working in an ecosystem where there are hundreds, if not thousands, of different partners it’s so important we build a company that plays well with everyone in the sand box,” said Singerman in an interview. “The hard part is you take what they do in the normal offline world and bring it online in a way that works for them and their business model. I think preserving that independence and this capital really helps us solidify that.”
Santander Holdings USA, Inc., SVB Financial Group, the parent of Silicon Valley Bank, and Crosslink Capital all participated in this funding round for AutoFi.
Santander and AutoFi have had a relationship for about four years according to Singerman. In conjunction with the funding announcement, Santander said that bond is becoming stronger.
In a separate news release Santander Consumer USA Inc., (SC) a wholly owned subsidiary of Santander Holdings USA, Inc. announced the expansion of its partnership with AutoFi to nationally launch SC’s end-to-end digital car buying experience.
“Our new digital product suite will connect dealers, consumers and vehicles more effectively than ever before. By personalizing and streamlining the car buying process, everyone wins. Shoppers see exactly what they can purchase, and dealers can self-service each deal to meet the needs of their customers,” said Santander Consumer USA President and CEO, Mahesh Aditya in the release.
Singerman explained Santander is one of the biggest auto finance companies in the world and has been one of the finance options AutoFi has offered its customers. The company approached AutoFi when it decided to improve its own online services.
“They came to us and said we want to think about how to transform ourselves as an auto lender to support these new…ecommerce experiences and removing friction from the finance process,” Singerman said.
Indeed, removing the “friction” from what can be an hours-long process to purchase and finance a vehicle is the where the business has to go, Singerman said. AutoFi’s platform attempts to do that by integrating the online, remote and in-store automotive sales experience so a customer can secure credit approvals and a firm financing offer from AutoFi’s network of lenders.
While the move to a more digital business model for dealers and lenders was already underway for several years, it was vastly accelerated once the Covid-19 pandemic took hold two years ago as health concerns closed showrooms and deals were done remotely.
Now, as the pandemic begins to ebb, showroom traffic is returning, especially with customers who prefer to complete some or all of the process in-person. The key to success, says Singerman, is to use technology to “empower” the consumer to provide a “joyous” experience regardless of how he or she wishes to purchase a vehicle.
It’s simple, he said. “Empowerment and joyous versus disconnect.”