Automotive e-commerce platform developer Shift has agreed to purchase Fair Technologies, a US-based peer backed by corporates SoftBank, MMI Holdings, CreditEase, Munich Re, BMW, Siemens, Mercedes Benz and Penske Automotive.
Fair began life in 2016 as an online automotive leasing platform but rebranded to Fair Technologies in August 2021 while revealing it planned to pivot to an end-to-end e-commerce marketplace model in early 2022.
The company’s platform allows users to shop for cars from a variety of sources, organise a payment plan and buy the vehicle by providing their bank details and driving licence.
The deal will give publicly listed Shift access to Fair’s technology and team. Telecommunications and internet group SoftBank – an investor in both companies – will help finance the cash-and-stock deal through the acquisition of senior unsecured notes from Shift due in 2025.
Shift founder and chief executive George Arison said: “Shift and Fair share the same goal: to simplify the used vehicle purchasing process and empower customers through the entire lifecycle of car ownership.
“At Shift, we have long envisioned building a digital marketplace where both dealers and independent sellers can list their cars alongside Shift’s owned inventory, offering customers access to a greater selection of owned and third-party vehicles for a test drive or direct purchase – with all transactions fulfilled through Shift’s proprietary logistics network.”
Fair’s most recent financing was a $500m credit facility led by financial services firm Mizuho Bank in September 2019, with SoftBank also among the participants. Financial services holding group Ally Financial had supplied $100m in equity and debt financing the previous month.
Silicon Valley Bank had provided $50m in debt financing for the company in January 2019, the month after SoftBank led a $385m series B round featuring insurer MMI’s Exponential Ventures subsidiary, online lending platform CreditEase, reinsurance firm Munich Re’s Ergo Fund and G Squared.
The 2019 round valued Fair above $1bn and followed $50m from industrial technology producer Siemens’ Next47 unit, CreditEase’s FinTech Investment Fund, automotive manufacturer BMW, G Squared, Millennium Technology Value Partners, 137 Ventures and Upfront Ventures the previous year to push its total funding to about $100m.
BMW subsidiary BMW i Ventures had led the company’s series A-1 round in 2017, investing with carmaker Mercedes Benz and car dealership operator Penske. It followed $16m in seed capital from Javelin Venture Partners, CRV, Foundation Capital and Sherpa Capital earlier that year.
Photo courtesy of Felix Fuchs via Unsplash.
