Welcome to another edition of The Friday 5 with Steve Greenfield, Founder and CEO of Automotive Ventures, an auto technology advisory firm that helps entrepreneurs raise money and maximize the value of their companies.
We’ve got a lot of deals to announce this week, so let’s dive right in.
ACV Auctions
As we reported two weeks ago, ACV Auctions is about to go public via IPO.
ACV expects to raise approximately $314 million in their initial public offering, set for next week on March 24th.
The IPO would give it a market value of $3.1 billion dollars.
ACV is offering 16.55 million shares of Class A common stock. It plans to list its shares on the Nasdaq Stock Market under the ticker “ACVA”. In the filing, ACV estimates the IPO price will be between $18 and $20 per share.
Since its 2014 inception, ACV has facilitated over 750,000 wholesale transactions between over 21,000 dealers and commercial partners.
ACV Auctions was founded in 2014 and achieved $208 million dollars in revenue in 2020.
ACV is bound to be one of the year’s most exciting deals in the automotive space.
Car Capital
As we announced last week, Car Capital was raising money. This week the company announced that it has closed the $8.8 million Series A funding round.
The company has developed a proprietary, web-based platform to give every dealer partner the power to approve 100% of their consumers, regardless of credit history.
The funding round was led by FM Capital with participation from more than 50 individual and institutional investors, including Automotive Ventures and Medalist Partners.
Car Capital launched operations with a select group of beta dealers. The company said it will roll out to a broader group of dealer partners in the coming weeks.
RAVIN.AI
KAR Global has announced a $15 million dollar series A investment in artificial intelligence solution for vehicle inspections company RAVIN.AI. This comes after the January 5th news that Manheim acquired AI data imaging company Fyusion.
Clearly, vehicle imaging and damage detection is a hot space right now.
Ravin’s existing investors, PICO Venture Partners and FM Capital, also participated in the round.
To date, Ravin has raised approximately $25 million dollars. Other investors in the company include Shell Ventures and individual investors such as General Motors’ former CEO, Rick Wagoner.
Cruise
Cruise, a majority-owned subsidiary of General Motors, will acquire self-driving startup Voyage in another major autonomous vehicle merger.
Cruise mainly operates its autonomous vehicles in dense, urban settings like downtown San Francisco, while Voyage oversees a fleet of low-speed autonomous vehicles providing trips to residents of several retirement communities. Both companies have tested their vehicles without a safety driver behind the wheel and aspire to launch full-fledged commercial robot taxi services.
Prodigy Software
There was some exciting action this week in the Digital Retailing space.
Nasdaq listed Upstart Holdings, a leading artificial intelligence lending platform, announced it has entered into a definitive agreement to acquire Digital Retailing software company Prodigy Software.
Details of the transaction were not announced.
Word on the street is that other Digital Retailing software companies may have M&A news later this year.
Carpay
Carpay, a loan management software company focused on Buy Here Pay Here dealers, closed on a Series A Round, bringing the total raised to $9.9 million dollars. The round was led by AutoTech Ventures, with additional participation from Social Leverage, Amplify.LA, Pipeline Capital and FJ Labs.
The Buy Here Pay Here segment makes up about $100 billion dollars of America’s outstanding auto debt. Where Carpay comes into this asset class is in two ways:
First, Carpay’s Loan Management Software helps BHPH dealers manage their loan portfolios and keep delinquencies under control. It helps get late customers caught up, and prevent others from falling behind, by making it easier for the borrowers to pay for and manage their auto loans themselves.
Second, Carpay Credit, launching Q2 ’21, will give BHPH dealers a line of credit secured by their loan portfolio, so that they can stock their lot full of cars and keep issuing more credit to more of these consumers.
Spireon
Spireon announced the acquisition of the LoJack Corporation’s Stolen Vehicle Recovery business from CalAmp.
The integration of the LoJack U.S. business bolsters Spireon’s position as the leading provider of aftermarket telematics for automotive dealers, while supporting CalAmp’s focus on its strategic global software-as-a-service initiatives.
Congratulations to Kevin Weiss and Brian Skutta at Spireon for getting this deal done!
Refraction AI
Refraction AI has raised a $4.2 million seed round.
With an initial prototype built on a bicycle foundation, the company’s REV-1 robot is designed to operate in bike lanes and roads, rather than the standard sidewalk ‘bot. The different approach allows the robot to travel at higher speeds (topping out at 15 miles per hour) and removes some of the messy pedestrian-dodging issues that come with sidewalk use (while introducing some new ones on that narrow sliver of asphalt shared by cyclists).
Northvolt
Swedish battery maker Northvolt has acquired U.S. startup Cuberg, gaining access to technology that could significantly boost the range of its electric-vehicle batteries — in the latest move in a race between upstart battery makers and established ones to gain a competitive edge.
The deal comes as Europe becomes a focus for the industry, with Asia’s big dominant battery makers competing against Europe’s homegrown startups to supply auto makers such as Volkswagen, Stellantis, BMW Group and Daimler with the batteries that will power millions of electric cars.
Optibus
Optibus, an Israeli-based startup that provides a platform to analyze how vehicles and people move around in cities — and then provides navigation, scheduling, driver rostering and other guidance for mass transportation providers to service those cities better — has raised a $107 million dollar Series C round.
The company is not disclosing its valuation but CEO and co-founder Amos Haggiag confirmed that it’s gone up 4X since its last round in 2018. The valuation is likely between $400 million and $500 million dollars.
Lightyear
Dutch solar electric vehicle maker Lightyear says it will bring its first car to market at the end of this year following a $48 million dollar injection of capital.
The Lightyear One, as their first model is called, differs from ordinary EVs in that it has built-in solar panels, which the company says add an extra 12 kilometres of range for every hour they are in use. This means that, in sunny areas, the car can be used sporadically for long periods without being plugged into an external electricity supply.
The company says the Lightyear One will have an “exceptional” range of up to 725 kilometres thanks to the built-in solar panels. It says it will be able to recharge from its own solar roof “up to 80 per cent of the annual yield for an average driver in San Francisco”.
RumbleOn & RideNow Powersports
RumbleOn and RideNow Powersports have announced a definitive agreement to combine companies. The combination forms the “first omni-channel customer experience in powersports in North America.”
The $575 million dollar RideNow purchase price is to be paid $400 million in cash and $175 million in RumbleOn Class B common stock; Up to $280 million of cash consideration to be funded via new debt financing committed by funds managed by Oaktree Capital Management.
The Pro Forma company sold more than 63,000 vehicles in 2020, generating revenue of approximately $1.3 billion dollars, net income of approximately $65 million dollars and adjusted EBITDA of approximately $91 million dollars.
Zego
Zego, the insurtech that got its start by offering flexible motorbike insurance for gig economy workers but has since expanded with a range of tech-enabled commercial motor insurance products, has raised $150 million dollars.
Leading the London-based company’s C round — giving it a $1.1 billion dollar valuation and a unicorn status — is DST Global. Other new backers include General Catalyst. Zego has now raised more than $200 million dollars since launching in 2016.
The insurance company says it will use the funding to “rapidly expand across Europe and beyond”. It will also double its workforce, which currently stands at 265 employees, to over 500 employees by the end of 2021, and continue to invest in technology.
Zego offers commercial motor insurance for businesses, from self-employed drivers and riders to fleets of vehicles, spanning pay-as-you-go insurance to annual policies. It combines tech with multiple data sources to offer insurance products that it claims save time and are more cost-effective. It earned its own insurance license in 2019, enabling it to build and sell its own policies, in addition to working alongside other insurers.
Via Transportation & Remix
Via Transportation has acquired mapping software maker Remix for about $100 million dollars, as the company seeks a larger slice of the new market bringing together ride-sharing and public transportation.
The deal is the third acquisition over the past several months for Via, which is bidding to play a central role as cities, transportation authorities and universities recalibrate their transportation offerings in the wake of the coronavirus pandemic.
Remix, which was founded in 2014, has software that uses data to help cities plan their transportation routes and make decisions on such things as where to put one-way streets, bike lanes or special lanes for emergency services. Remix investors cashing out as part of the deal include venture-capital firm Sequoia Capital and Y Combinator.
Wejo
Wejo is closing in on a deal to go public through a reverse merger with a blank-check company that would value the British connected car data start-up at more than $2 billion dollars.
Wejo, which organizes data from about 15 million connected vehicles for such clients as General Motors, Hyundai and Daimler, is still working to finalize a deal with a SPAC.
Wejo estimates that by 2030, 72 million new vehicles sold worldwide will be connected, creating an opportunity for revenue streams and more services for automakers and their customers, as well as greater efficiency for companies in product development.
Wejo’s technology platform ADEPT, allows automakers to organize the data collected in those vehicles.
Companies to Watch
Every week we highlight interesting companies in the automotive technology space to keep an eye on. If you read my monthly industry intel report, I showcase a few companies each month, and we take the opportunity here on the Friday Five to share some of those companies each week with you.
Today, our companies to watch are VinTel and RecallRabbit.
VinTel by VinLogx
Our first company to watch is VinTel by VinLogx, which was founded in 2014 and is located in St Charles, Missouri.
VinTel aims to be The Standard For Automotive Diagnostic Reporting.
VinLogx is an innovative hardware solution provider that administers secure, remote asset authentication via custom embedded machine-to-machine devices and integrated data sharing services with cloud capabilities.
VINTEL brings an integrated, standardized diagnostic solution for real-time critical vehicle health, diagnostic, emissions and reset information that is utilized throughout the automotive industry.
RecallRabbit
Our second company to watch today RecallRabbit
Recall Rabbit was founded in 2018 in Austin, Texas by Stephen Granger.
RecallRabbit is trying to help solve the automotive recall problem facing dealers. 1 in 4 cars in the U.S. has a recall that needs to be repaired, which equates to over 64 million cars that need to be fixed. A number of those are sitting on car dealers lots for sale.
The average cost of a recall is $548. That is over $31.5 BILLION worth of revenue sitting out there waiting for dealers to capture.
Recall Rabbit helps dealers connect to fix recalls on used inventory. They are like the Match.Com for dealers and recalls.
The Recall Rabbit technology helps dealers connect to solve the recall issues they have on their used inventory.
Dealers get a few benefits from the Recall Rabbit service:
First, they Get More RO’s, and get consistent Work Every Week In Their Service Bays
Second, they receive Increased ROI, as dealers are able to tap into a totally Unique Untapped Source of Revenue.
And finally, dealers only Pay For Results, unlike a lot of other services.
Recall Rabbit is creating a marketplace that will help dealers resolve recall issues and provide a better product for their customers
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So that’s your weekly Friday 5, a quick wrap-up of the big deals in automotive technology over the past week.
It’s an exciting time to be in the automotive space, with a ton of deals going on. Make sure you stay tuned in each week to stay up to date on the auto industry’s technology M&A activity. I’ll keep my fingers on the pulse of deals being done, so I can share updates with you.
If you’re an early-stage automotive technology entrepreneur looking to raise money, or an entrepreneur who wants to chat about the best timing and process to sell your company to achieve the best outcome, I’d love to discuss it with you at steve@automotive.ventures.
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