Car subscription platform FINN raises $27M, adds trucks
The company has raised more than $900M in debt and equity funding
Vehicle subscription platform FINN has launched pickup truck subscriptions and expanded its fleet business after securing an asset-backed facility to fund vehicle purchases.
FINN this week secured a $27.2 million asset-backed facility with private investment firm Avellinia Capital, according to a company release. FINN has raised a total of $935.4 million through equity and debt financing, about $770 million of which is from asset-backed securities (ABS) financing, according to Crunchbase. FINN in May raised $110 million in a series B round led by Korelya Capital.
The company, founded in Germany in 2019, began operations in the U.S. last year. FINN offers subscriptions for electric, hybrid and gas cars — allowing consumers to log in to the website or app, select their vehicle and choose a subscription term.
FINN’s subscriptions are for six- or 12-month terms and range from $570 to $1,399 per month based on term, vehicle type and state tax, Kevin Allen, company spokesperson, told Auto Finance News. Monthly payments cover maintenance, registration and roadside assistance. FINN delivers the vehicles to consumers
FINN’s inventory includes 30% EVs and 55% electrified vehicles, including hybrids, Max Beyer, chief financial officer, told AFN, noting that 85% of customers opt for a 12-month term. Pickup trucks are also now available.
Electric vehicles have boosted car subscriptions, prompting multiple startups to enter the industry. FINN joins subscription-based companies including Autonomy, DriveItAway Holdings and Spring Free EV.
FINN’s number of active subscriptions doubled in the first six months of 2023 compared with yearend 2022, Allen said. By comparison, FINN in January had more than 1,000 active individual subscriptions and averaged about 10 subscriptions a day in the U.S.
Globally, FINN has about 23,000 active subscriptions, with a goal to have 1 million cars on the road by 2030, Allen said.
Financing inventory
FINN purchases vehicles for its platform directly from suppliers. Available brands as of this week include Chevrolet, GMC, Jeep, Nissan and Ram, according to FINN’s website. FINN pre-sells vehicles to dealership groups for delivery when subscriptions end, typically after 12 to 18 months, Beyer said.
The company has relied on capital funding to finance vehicle purchases and equity funding to invest in operations. With the revolving facility through Avellinia, which expires at the end of 2025, FINN can now finance 100% of the cost of a vehicle with debt financing, freeing up equity funding to grow the business in Germany and the U.S., Beyer said.
“The latest round of financing was to extend our existing debt funding,” he said. “We always want our debt funding to … cover as much of the vehicle value as possible so that all of the equity that we collect we can deploy for growth instead of pouring it into purchasing vehicles. Every vehicle that we purchase is fully funded by our debt facility, and this frees up more growth capital without raising additional equity.”
Growing B2B fleet subscriptions
In January, FINN also launched business-to-business fleet services with six- to 12-month terms, with FINN delivering and picking up the vehicles. FINN has 36 fleet partners, Allen said.
In Germany, more than half of FINN’s subscriptions are from businesses subscribing to multiple cars at a time, Beyer said.
“We’ve built a very successful B2B sales team and are now nurturing those accounts, and we see B2B growing month over month,” he said. The B2B businesses start out “filling the sales pipeline and acquiring accounts, in many cases with one or two vehicles, but then they grow organically as they switch from lease cars that come back to a subscription.”
Pickup trucks are also now available to fleet customers, Allen said, noting standard pickups are often used for commercial jobs.
FINN’s annual recurring revenue stands at about $174 million, according to the release.
“We have a very specific growth plan that we execute, what we call a fully funded case,” Beyer said. “With the committed capital that we have, we can sustain ourselves and reach profitability on group level next year.”
FINN’s U.S. delivery radius covers Connecticut, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont, Virginia and Washington, D.C., according to the website.
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