Friday 5 Special Edition: On-site at the 2022 NADA Show in Las Vegas

Welcome to this episode of The Friday 5 with Steve Greenfield, Founder and CEO of Automotive Ventures, an auto technology advisory firm that helps entrepreneurs raise money and maximize the value of their companies.

I’m excited to be reporting this week’s Friday Five from the National Auto Dealers Association conference out here at the Las Vegas convention center. 

After a year off with last year’s virtual NADA, it’s really good to be back for a fun-filled weekend of back-to-back meetings and catching up with hundreds of industry friends.

There’s a lot of interesting news this week, given that many companies make specific announcements to coincide with the NADA convention. 

So let’s get started. 

AutoFi

The biggest news this week in the AutoTech investment and M&A world is that F&I platform AutoFi announced an $85 million financing from investors that included Santander Consumer USA, and joined by Crosslink Capital and Silicon Valley Bank parent company SVB Financial Group.

The latest funding round translates into a nearly $700 million valuation for AutoFi and follows four straight years of doubling revenue.

AutoFi’s software allows consumers to browse dealership inventory and see financing offers tailored to the dealership’s preferences. It handled more than 1 million financing requests to lenders and was associated with more than $3 billion in sales last year.

AutoFi used its new RealPayments platform as an example of what it planned to fund with the $85 million. RealPayments reverses the traditional order of operations. Customers get preapproved for credit and then sort inventory by vehicles affordable under the loan. Users only spend time on vehicles they can finance.

The company grew from 80 employees in 2020 to 220 by the end of 2021, and is projected to grow to at least 300 staffers by the end of 2022.

Ford Motor Company

Next up, Ford Motor Company is creating a lot of buzz out here this week as they make big changes to the company structure and their dealerships.

Ford that they would separate their company into halves. One half – Ford Blue would be responsible for engineering, sales, manufacturing, and the eventual wind-down of the ICE business.

The other half – Ford Model e would be in charge of R&D, sales, and manufacturing of EVs and the launch of mobility services.

This is a BOLD move from Ford and not just because every legacy automaker was already trying to figure out how best to separate the two seemingly disparate businesses but because they’re leaning into it. This puts pressure on the other automakers to do something similar and/or more extreme.

Ford wants to craft a new set of operating standards for EV sales that would combine the most popular aspects of direct-sale startups with the expertise its dealers have developed over more than a century:

– a commitment to carrying no inventory

– selling at nonnegotiable prices

– operating with scaled-down facilities

Each of its roughly 3,100 U.S. dealers will have the opportunity to “opt-in” to sell EVs alongside gasoline-powered vehicles under the new standards, similar to how its commercial vehicle dealers must adhere to certain requirements. Those who cannot afford to or choose not to will continue to sell combustion vehicles. It’s unclear whether Ford will let dealers choose to sell only EVs.

Mobileye

Finally, Intel Corporation said Monday its Mobileye autonomous vehicle technology unit has confidentially filed paperwork for an initial public offering in the United States, which could value it at more than $50 billion.

Intel did not give more details about the offering, but has previously said it would receive the majority of the proceeds from the share sale. Some of those funds will be used to build more Intel chip plants, CEO Pat Gelsinger said in December.

The chip giant will also retain a majority stake in the unit after the IPO, it has said previously.

Mobileye, an Israeli company that Intel bought for about $15.3 billion in 2017, uses a camera-based system with adaptive cruise control and lane change assistance in driverless cars.

The company, founded in 1999, plans to eventually build its own lidar sensor to help its cars map out a three-dimensional view of the road. It is currently using lidar units from Luminar Technologies on its initial robotaxis in the meantime.

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As I mentioned last week, we at Automotive Ventures are now actively fundraising the Automotive Ventures DealerFund – to help auto dealerships navigate through the next decade of unprecedented change, invest into, and participate financially in the AutoTech startups they help to grow.

If you’re an auto dealer, and you’d like to find out more, let me know. I look forward to working with you to bring the new Automotive Ventures DealerFund to market.

It’s great to be back out here at the NADA conference in Las Vegas after a year off. It’s great to catch up face to face with so many industry folks after missing out on the experience last year.

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My new book titled The Future of Automotive Retail is now available! In the book, I overview the various themes that are most likely to impact auto dealerships’ businesses over the next 5 to 10 years, and I attempt to provide some practical advice on how to prepare to weather upcoming disruptive forces.

For all of you who tune in to the Friday Five, I’d be thrilled to send you a copy of the book, just click here.

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People often ask me why I’m affiliated with CBT News.

Besides having an outstanding, extremely talented, and hardworking team up here at the studio, I greatly appreciate the valuable role that CBT News plays in the automotive industry.

Every day, I eagerly look forward to my morning email from CBT News to ensure I’m getting the most up-to-date and relevant information on the industry.

I encourage you to tune in to CBT News to ensure that you’re getting the automotive news that matters.

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So that’s your weekly Friday Five, a quick wrap-up of the big deals in the automotive technology space over the past week.

If you’re an early-stage automotive technology entrepreneur looking to raise money, or an entrepreneur who is trying to decide whether and when they should raise money or sell their business, I’d love to speak with you.

Thank You For Tuning into CBT News for this week’s Friday Five, and we’ll see you next week!

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