Shift Technologies, a US-based online used car retailer backed by corporates BMW and Lithia Motors as well as multi-corporate venturing fund Alliance Ventures, announced on Monday it will go public through a reverse merger.
The company will merge with Insurance Acquisition, a special purpose acquisition vehicle listed on Nasdaq. The deal is expected to close in Q3 2020 and will involve Insurance Acquisition changing its name to Shift and taking on a new, as yet undisclosed ticker symbol.
The deal consists of an aggregate consideration of approximately $380m shares in Insurance Acqusition and up to 6 million additional shares if certain price targets are met. Investors including financial services group Fidelity and investment manager ArrowMark Partners have also committed to buying $185m of shares in Insurance Acquisition.
Founded in 2013, Shift operates an automotive e-commerce portal that enables users to buy, sell and finance cars, and to request test drives. The merger will help it scale its operations, and its existing management team will remain in place following the close of the transaction.
Shift has raised approximately $300m in equity and debt financing, most recently closing a series D round featuring BMW i Ventures, a subsidiary of automotive manufacturer BMW, as well as car dealership operator Lithia Motors and Alliance Ventures, representing carmakers Renault, Nissan and Mitsubishi, at more than $180m in April 2019.
Goldman Sachs’ Investment Partners unit, DFJ, DCM Ventures, G2VP and Highland Capital Partners also took part in the 2019 round. All four had participated in a $38m series C round for the company in 2017 that was led by BMW i Ventures.
Goldman Sachs Investment Partners had previously led Shift’s $50m series B round in 2015, with contributions from existing investors DCM, Highland Capital and DFJ.
