BMW i Ventures Invests in AutoFi, a San Francisco-based Vehicle Financing Startup
The era of haggling with a salesperson to purchase a vehicle may soon be over, as technology continues to play a role in the purchase of a new vehicle and upending the traditional dealership model in the process. As a result, new startups are emerging to make the car buying experience more convenient using software-based technology.
BMW i Ventures, the venture capital arm of the German automaker that invests in startups in the fields of autonomous driving, digital car services, AI, automotive cloud and other on-demand mobility services, announced today an investment in AutoFi, a technology company that is looking to disrupt the way cars are bought and sold.
San Francisco-based AutoFi operates an e-commerce software platform that allows car buyers, for the first time, to purchase and finance a car entirely online, providing a fast, mobile-first checkout experience.
AutoFi doesn't eliminate the car dealer from the transaction, rather it improves upon a dealer's website so customers will just need to visit the dealer of their choice to pick up their new vehicle and sign the final paperwork, which takes around 15-30 minutes.
AutoFi's platform also connects the car dealers directly to customers, so the dealer can send texts or emails while they browse vehicles.
BMW i Ventures believes that AutoFi's platform could become the standard way to buy a car in the future.
Customers can also compare prices, get the value of their trade in, and receive real-time offers from the dealer on add-on items, such as vehicle accessories. All from AutoFi's easy to use web platform.
Once prospective buyers have found their desired model on a partner dealership's website, they can click on the AutoFi "Smart Shop" button to shop for the best financing deals. They will receive multiple offers from lenders and can use an online calculator to change their downpayment of financing terms and get the results instantly.
"The AutoFi team has built a cutting-edge solution providing transparency through connecting key stakeholders in the auto financing industry: financial institutions, dealers and consumers" said Baris Guzel of BMW i Ventures. "We are convinced that AutoFi has the potential to be the industry standard checkout for all automotive transactions, and we are thrilled to join the journey."
AutoFi's platform is integrated with leading financial institutions, so customers can submit simple credit applications to a number of lenders all at once, including well known auto lenders Chase Bank, Ford Motor Credit and Santander. AutoFi's investors include Ford Motor Credit Company and Santander InnoVentures. Ford Motor Credit invested $10 million in AutoFi in 2017.
AutoFi says its platform is the only one in the industry that offers real-time financing offers. Potential buyers receive multiple quotes within 90 seconds. AutoFi can turn a dealer's website into a 24/7 online store, so customers shop for vehicles on their own terms.
"We are excited to partner with BMW i Ventures to lead our Series B financing. They set themselves apart as an investor that deeply understands the automotive ecosystem. We share the belief that the industry tailwinds of digitization and transparency create amazing consumer experiences, as well as profitable businesses for manufacturers and dealers. We look forward to working with them to help support and grow our expanding network of dealers, lenders, and OEMs" said Kevin Singerman, CEO and Co-Founder at AutoFi.
AutoFi will use the investment to expand its sales and customer support, and continue its rapid pace of product innovation. AutoFi's team includes industry leaders from enterprise software, finance, automobile and consumer sectors.
The amount of the investment was not disclosed.
Some car buyers however, would probably like to eliminate the car dealership visit altogether. For example, Tesla has become the world's biggest electric vehicle brand without a network of dealers and only sells its cars online.
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