Retail startups that offer autonomous capabilities, artificial intelligence and cloud-based automotive retail opportunities are taking the auto finance industry by storm. During last week’s Auto Finance Summit in Las Vegas, executives from HyreCar, MotoRefi and NextCar named the tech startup companies they are keeping a close eye on as the industry advances.
Cloud-based software company Tekion uses artificial intelligence (AI) technology for automotive retailing. Since it was founded in 2016, the San Ramon, Calif.-based startup has sold more than 170,000 vehicles, completed $2 billion in transactions, and facilitated maintenance and service for more than one million vehicles, according to its website.
Tekion’s founder and Chief Executive Jay Vijayan — a former chief information officer at Tesla — is “breaking all the rules,” HyreCar President Brian Allan said at the Summit, noting Tekion represents a potential communication solution that could outshine document management systems (DMS) and customer relationship management (CRM) technologies.
The startup has raised $435.1 million through series D funding with investors, including Hyundai Motor Company and BMW i Ventures. The company is now valued at $3.5 billion, up from last year’s $1 billion valuation.
San Francisco-based tech startup Metromile offers pay-per-mile car insurance, automated claims and smart driving features. Usage-based insurance, instead of mileage-based insurance, is expected to be the future of car insurance, according to NextCar founder and Chief Executive Scott Painter.
Metromile is in its 10th round of funding since its founding in 2011, and has raised $510 million with lead investments from New Enterprise Associates and AmTrust Financial.
3. ACV Auction
ACV Auction’s mobile platform is a full-service marketplace for wholesale dealers to sell trade-ins through app-based auctions. The digital marketplace is smaller than Manheim but retains more value per car sold in dollar revenue, NextCar’s Painter said.
ACV, founded in 2014 and based in Buffalo, N.Y., has raised $351 million so far through series E funding.
Miami-based Pipe is a trading platform for recurring revenue streams which connects companies to investors. Pipe, founded in 2019, offers subscription-based companies a way to pull forward subscription revenue through debt financing. In the automotive space, this will create a retail outlet for investors by allowing them to choose which car companies to invest in, Painter said.
Pipe has raised $316 million in funding and is in its venture round, backed by 51 investors including Craft Ventures, Next47 and Raptor Group.
Aurora is working toward integrating autonomous driving capabilities into any vehicle. “I don’t think we are going to change driver behavior, so let’s change the behavior of the vehicle instead,” MotoRefi Senior Director of Lender Development Drew White said at the Summit.
The autonomous technology company, founded in 2017, is in a corporate round of funding and has raised $1.1 billion. Its investors include Amazon, Hyundai Motor Company, Shell Ventures and Uber.
6. Zest AI
Zest AI is an artificial intelligence-driven company that speeds loan decisioning through borrower assessment technology. The technology works to better understand the risk of a consumer, with the idea that not all credit scores are created equally, MotoRefi’s White said.
The Burbank, Calif.-based company was founded in 2009, and has raised $250 million in financing; investors include First Round Capital and Goldman Sachs.