Automotive remarketing technology provider KAR Auction Services agreed yesterday to buy BacklotCars, the operator of an online automotive reselling platform, in a $425m deal that will enable social media company Renren to exit.
Founded in 2015, BacklotCars is the owner of an online dealer-to-dealer marketplace for second-hand vehicles, allowing companies such as rental services and dealers to buy and sell cars without having to travel. Inspections are carried out by trained mechanics it employs.
The acquisition is intended to strengthen KAR’s online auction platform, TradeRev. BacklotCars co-founders Justin Davis, Ryan Davis, Josh Parsons and Fabricio Solanes will carry on running the company’s service from its current headquarters in the state of Missouri.
BacklotCars had raised about $50m pre-acquisition, including $8m in series A funding from Origin Ventures, Pritzker Group Venture Capital, KCRise Fund, Revolution’s Rise of the Rest Seed Fund, Royal Street Ventures and Chaifetz Group, together with $10m debt financing, in December 2018.
The company secured $25m three months later in a series B round led by Stripes and backed by all the series A investors that took its total funding to $38m. Ryan Davis had identified Renren as an investor on his LinkedIn page.
Jim Hallett, KAR’s chairman and chief executive, said: “BacklotCars has grown rapidly in the highly competitive dealer-to-dealer space and is the perfect complement to our current capabilities and footprint.
“I am confident the addition of Backlot’s leadership, technology and exceptional customer-service model will quickly benefit our combined customers, enhance KAR’s competitive position and accelerate growth for both organisations.”
