Buying a car can be a daunting experience, but Modal is out to make the process easier and in a way that can be accomplished from the comfort of your couch.
Subscribe to the Crunchbase Daily
“We aim to be the ‘Shopify’ for vehicle retail,” Modal founder and CEO Aaron Krane told Crunchbase News. “There has been a lack of collaboration between technology companies and this vertical of retail–a vast majority of dealerships have no e-commerce whatsoever.”
The San Francisco-based company, which provides an e-commerce platform to automotive dealers and brands, raised $15 million in Series A funding to continue developing completely online buying experiences that fit inside a dealer’s web pages.
Modal’s newest automotive partner, American Honda led the investment and was joined by unnamed existing investors. The new investment gives the company just over $20 million in total funding since being founded in 2016, Krane said. That includes a $5.2 million seed round in 2017, according to Crunchbase data.
With the new funding, Krane intends to triple Modal’s product engineering team to meet demand for new technologies and ownership experiences, including finance, insurance, contract and service. The company met a few milestones in 2020, including generating a 700 percent increase in online-checkout customers and working with more than half of the publicly traded automotive retailers, as well as achieving profitability in May.
“Revenue is our main key performance indicator, and we have been doubling year over year,” Krane said. “I don’t think there are many players in the space who can say they have activated more than 30 percent of U.S. brands in three months.”
As e-commerce becomes the preferred way to shop, it’s no surprise that the automotive sector is jumping onboard, along with investors. We’ve reported companies, such as Vroom, an online used car retailer, raising $254 million in Series H funds in 2019, along with competitors including Carvana (which has raised $1.6 billion in funding), and CarGurus (which raised $1.8 million).
Luke Moore, digital experience manager at Bob Moore Automotive Group in Oklahoma, said in a written statement that Modal’s approach has the buyer in mind.
“We’re selling an average of 30-40 cars per month with Modal,” he said. “Earlier in the year, we were even earning 25 percent more back-end profit on Modal orders.”
Meanwhile, the partnership with Honda will give Modal a template for national brand-level e-commerce success and a proprietary playbook it can offer to others, Krane said.
“We see this growth trend continuing this year and anticipate 2021 will accelerate,” he added. “This will also be the first year we do marketing and sales. All of the growth, thus far, has been inbound and organic by customers that have found us.”
Illustration: Li-Anne Dias
Stay up to date with recent funding rounds, acquisitions, and more with the Crunchbase Daily.