Goldman Sachs injects $45 million into MotoRefi. This comes just 5 months after $10 million were put into the fintech startup to help turbocharge its auto refinancing business.
MotoRefi has raised $60 million since its inception in 2016.
Purpose and USP of MotoRefi
MotoRefi made an auto refinancing platform that handles the entire loan process. This includes finding the best rates, paying off the old lender, and re-titling the vehicle. MotoRefi claims using its platform saves consumers an average of $100 a month on their car payments. This became possible because it works directly with lending institutions. The company’s refinancing tools had seen steady growth until the COVID-19 pandemic became aggressive.
Instead of all this, CEO Kevin Bennett said MotoRefi is on track to issue $1 billion in loans by the end of the year, a fivefold increase from the same period last year.
Bennett said that the investor’s confidence in its metrics is what led to the short timeline between rounds. The investors’ support has continued on to grow at a fast pace, and consequently, the basic economics around the business too.
On MotoRefi getting $45M from Goldman Sachs, Bennet says their track record helped move the scheduled expansion up.
We candidly weren’t planning on raising yet. But they (Goldman Sachs) were comfortable, given the relationship we have built and the track record and success of the business, to preempt the round and move that calendar upKevin Bennett, CEO of MotoRefi
Growth and workforce expansion
This platform is available in 46 states and Washington, DC. It plans to be live in all 50 states by the end of the year. The startup is hiring actively to help support that growth. It had more than doubled its headcount to 187 employees By the first quarter of 2021. Now the workforce is an impressive 250 employees. Hiring for senior-level executives has been done along with opening a new headquarters and partnering with SoFi. Goldman Sachs’s VP of venture capital and growth equity Jade Mandel has joined MotoRefi’s board.
And Bennett sees plenty of room to grow as consumers seek ways to rebalance their debts. In the U.S. alone the auto refinance market is $40 billion. However, overall auto loan debt is $1.3 trillion. Hence, 40 million auto loans originating every year. Therefore, a consistent flow of new customers is a given.
After the Goldman Sachs injection, the aim is to raise again by strategy as opposed to out of a need
Investors like IA Capital as well as returning backers Moderne Ventures, Accomplice, Link Ventures, Motley Fool Ventures, and CMFG Ventures were included in the fresh injection of capital. This will be used to continue to build out its products and services and hire more people.
Bennett believes the company is now in self-sustaining position.
Further adding, Bennett said, “Thankfully, we moved beyond the world where we are raising capital and then raising more capital as we run out of capital”. “I think we have a great sustainable business and so we, in some sense runway is infinite, and we are building a great profitable business. That’s not to say that we won’t ever raise again, but it will be based on strategic considerations, as opposed to out of necessity.”