TrueCar, Inc. Raises $200MM Debt and Equity Financing to Provide Growth and Acquisition Capital
SANTA MONICA, Calif., Sept. 7, 2011 /PRNewswire/ -- TrueCar, Inc., the only transparent publisher of real-time new (TrueCar.com) and used (ClearBook.com) vehicle transaction data, announced today that it has secured up to $200 million in debt and equity financing. A portion of the proceeds from this round of financing will be used to fund the development of new revenue streams, growth and strategic acquisitions.
"TrueCar has reached a point where we have an opportunity to forever change the car buying experience while also helping our certified dealers across the country," said Scott Painter, Founder and CEO of TrueCar, Inc. "The reality that consumers shop differently today than in the past, creating an opportunity to transform the entire system in a way that benefits both buyers and sellers."
TrueCar's busy summer has included August sales through its marketplace of more than 20,000 vehicles - bringing the total number of vehicles sold since inception to over 350,000 resulting in total savings to consumers of just under $1.5 billion with an average savings of $4,154 off of the Manufacturers Suggested Retail Price (MSRP).
Participants in the financing include current investors USAA, Capricorn Investment Group and GRP Partners. The financing involved the conversion of all shares of TrueCar preferred stock for common stock on a one-for-one basis, and the issuance of common stock to investors in the round. "Eliminating the liquidation preferences that come with Preferred stock results in a clean capital structure and a single currency that makes acquisitions much easier. It's a rare move for a privately-held company and reflects the confidence and support of all of our shareholders," said Scott Painter. "TrueCar has a performance track record of profitable, hyper-growth that is unique – especially in a tough economic climate," said Steven Dietz of GRP Partners.
New investors in TrueCar represent both strategic partners and financial firms that traditionally seek public company investments. Some of the high profile strategic investors in the equity financing include GR Match, LLC (an affiliate of Guthy-Renker, LLC), McCombs Family Partners and DealerTrack Holdings, Inc. (NASDAQ: TRAK). We believe that TrueCar represents one of the most compelling value propositions for consumers that are in the market to buy a new car. In addition to producing all direct response commercials for TrueCar which are scheduled to start airing in October, we were thrilled to align our interests further by investing in the company," said Boris Shimanovsky, President of GR Match, LLC. Financial investors in TrueCar include, GSV Capital Corp., Passport Capital, International Investment House and Allen & Company, LLC.
Debt capital is being provided by Silicon Valley Bank – among the most well-known financial partner to many of the hottest start-ups in the country. "Our mission is to help entrepreneurial companies of all sizes succeed by providing creative financing solutions as well as industry knowledge and connections. TrueCar is on the right track with consistent growth, despite a tough economy. We look forward to continuing to work with them as they grow," said Mark Turk, Managing Director for Silicon Valley Bank in Southern California.
The financing comes on the heels of two recent acquisitions made by TrueCar: first, the signing of a definitive agreement to acquire Automotive Lease Guide (ALG), the industry leading source for automotive residual values, from DealerTrack Data Services, a subsidiary of DealerTrack Holdings (NASDAQ: TRAK), who's Chairman and Chief Executive Officer Mark O'Neil said, "We are excited to be a partner and investor in TrueCar, a high growth, profitable and transformative company, that is equally focused on serving both the consumer and the automotive dealer;" and second, the acquisition of Carperks, a leading provider of automotive purchasing and leasing programs for over 1,000 U.S. businesses and their more than 25 million employees.
About TrueCar, Inc.
TrueCar, Inc. is focused on changing how cars are sold by providing a significantly better customer experience while helping qualified dealer partners to gain incremental market share and reduce costs. As a transparent, visual publisher of real-time new and used car transaction data, TrueCar.com price reports help both dealers and consumers to agree on the parameters of a fair deal by providing an accurate, comprehensive and simple understanding of what others actually paid for the identically equipped new car over the last 30 days both locally and nationally.
TrueCar, Inc. works with a national network of over 5,000 Certified Dealers that provide up-front, no-haggle, competitive pricing to assist some of the nation's largest and most well respected membership and service organizations to meet the auto buying needs of their members and customers. These partnerships include American Express, AAA, USAA, Consumer Reports and more than 60 others. Collectively these audiences represent over 1M in-market customers each month.
TrueCar works closely with financial advisors Allen & Company, LLC and uses Wilson Sonsini Goodrich and Rosati for outside legal counsel on corporate matters. TrueCar utilized a private investor portal on SharesPost in connection with the financing.
TrueCar, Inc. is headquartered in Santa Monica, CA and has offices in San Francisco. The company was founded in 2005 and has been profitable since 2009. With 131 percent annual growth since 2006, TrueCar has driven over 350,000 sales and is developing a suite of transaction oriented products and services centered on transparency and radical clarity as a result of comprehensively analyzing market data and information. You can follow TrueCar on Twitter and become a fan of TrueCar on Facebook.
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SOURCE TrueCar, Inc.