On April 15, BacklotCars of Kansas City, Missouri announced a $25 million Series B raise.
BacklotCars cars has raised more than $38 million since inception.
BacklotCars provides an online mechanism for wholesale car buyers to purchase cars without going to physical locations for auctions. The company has built tools for inspections – both physical and mechanical – providing a means for remote purchases with some assurance of actual state of the car.
The firm has focused itself on auto dealers and has a relatively straight-forward revenue model – the company makes money on a transaction basis ($100-350 per transaction according to the company’s website). According to the announcement, “BacklotCars’ condition reports, five-day guarantee, transportation, and inventory financing services add value to dealers throughout the purchase process, save hours of legwork, and expedite buyers’ supply chains.”
The April round (Series B) was led by Stripes group. Stripes is based in New York City and is a private equity group that focuses on Marketplace, SaaS, and Consumer businesses around the world. In recent months, Stripes has invested in companies around the United States, including Remine, Siete, Family Foods, and HyperScience.
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“We’re excited to have Stripes partnering with us on this next round of funding, as well as the continued support from existing investors,” said Justin Davis, CEO of BacklotCars.” Stripes’ experience with guiding high-growth, tech-driven marketplaces will be helpful as we double down on our mission of making wholesale easy.”
This April round and the recent December round for Backlot included familiar Midwest investors – the Pritzker Group Venture Capital, Origin, and KC Rise Fund.
It also included Revolution. Revolution is known for being operated by Steve Case and is a vehicle for his stated belief that other parts of the country (like the Silicon Prairie) have significant opportunities for investors. Specifically, since last October, Revolution has invested in multiple communities in the Silicon Prairie catchment area, including:
• Milwaukee – Bright Cellars
• Chicago – PartySlate, BenchPrep, The Minte
• Minneapolis/St. Paul – Dispatch
• Madison – Understory
• St. Louis – Summersalt
BacklotCars intends to use the new capital to strengthen its growing territorial expansion. In fact, the company reported that its geographic footprint expanded by more than 500% in 2018. The firm is committed to growth while maintaining quality. And that is why the investment and partnership with Stripes is critical to the long-term success of the firm. Stripes expertise in growing marketplace companies is well-known, as is their ability to maintain the quality of the products provided.
“We are thrilled to be joining the BacklotCars team,” said Saagar Kulkarni, Principal at Stripes. “The BacklotCars marketplace, combined with its transportation and financing products, is a complete solution for dealers. We believe their tremendous growth is proving that car dealers want a digital marketplace for buying and selling inventory. We look forward to partnering with Justin and the team as they continue to expand their footprint and create value for dealers nationwide.”
Kansas City continues its strong run of venture fundings in 2019 – including recent noteworthy fundings – PayIt, Core Medica, Mycroft AI, and Mylo Insurance.
For more information on BacklotCars, check out their website at www.backlotcars.com.
