MotoRefi raised an additional $ 45 million in a round led by Goldman Sachs just five months after investors poured $ 10 million into the fintech start-up to help boost its auto refinancing business.
The startup has developed an automatic refinancing platform that handles the entire loan process, including finding the best rates, paying off the old lender, and changing the title of the vehicle. MotoRefi claims that using its platform saves consumers an average of $ 100 per month on their car payments, a goal achieved in part because it works directly with lending institutions. The company’s refinancing tools had been growing steadily until the COVID-19 pandemic shifted into high gear. CEO Kevin Bennett said MotoRefi is on track to issue $ 1 billion in loans by the end of the year, a five-fold increase from the same period last year.
Bennett said the short time between cycles was driven by investor confidence in its parameters, which continued to grow at a rapid pace, and the basic economics around the company.
âWe frankly weren’t planning on relaunching yet, but they (Goldman Sachs) were comfortable given the relationship we’ve built and the company’s track record and success, to anticipate the turn and move this timeline forward, âBennett said.
MotoRefi’s platform is available in 46 states and Washington, DC, with plans to be live in all 50 states by the end of the year. The startup has ramped up recruiting to help support this growth. By the first quarter of 2021, it had more than doubled its workforce to reach 187 employees in the same period last year. Its workforce has now grown to 250 employees. The company hired several senior executives, opened a new head office and partnered with SoFi. Jade Mandel, vice president of venture capital and growth stocks at Goldman Sach, has joined MotoRefi’s board of directors.
And Bennett sees plenty of room to grow as consumers seek ways to rebalance their debts. The auto refinancing market in the United States is $ 40 billion. However, the overall auto loan debt is $ 1.3 trillion. With 40 million car loans granted each year, MotoRefi has been promised a steady stream of new potential customers.
The new capital injection, which included investor IA Capital as well as returning backers Moderne Ventures, Accomplice, Link Ventures, Motley Fool Ventures and CMFG Ventures, will be used to continue to develop its products and services and hire more. of people. MotoRefi has raised $ 60 million since its inception in 2016.
Bennett believes the company is now in a position of autonomy.
âFortunately, we’ve gone beyond the world where we raise capital and then we raise more capital when we lack capital,â he said. âI think we’ve got a great, sustainable business and so we, in a sense, the trail is endless, and we’re building a great, profitable business. That’s not to say we’ll never raise again, but it will be based on strategic considerations, as opposed to out of necessity. “