SureSale Goes After Used Car Market with a 'Gold Standard' Guarantee
Rachel Uranga covers the intersection of business, technology and culture. She is a former Mexico-based market correspondent at Reuters and has worked for several Southern California news outlets, including the Los Angeles Business Journal and the Los Angeles Daily News. She has covered everything from IPOs to immigration. Uranga is a graduate of the Columbia School of Journalism and California State University Northridge. A Los Angeles native, she lives with her husband, son and their felines.
Venture-backed startup SureSale is attempting to challenge the dominance of Carfax, a longtime industry standard in the used car market, with a more comprehensive certification akin to a manufacturer's guarantee that a vehicle is in good shape.
The Santa Monica startup, which certifies pre-owned vehicles with a background and 150-point inspection check, announced it secured $7 million in Series A funding this week led by Upfront Ventures with participation from Coffin Capital and Ventures.
The funds will be used to expand their product into dealers across the country, create partnerships with other sellers and market.
Upfront, which was an investor in online car-buying platform TrueCar, sees the company becoming a "gold standard brand."
Americans bought 40 million used cars last year, many looking for a bargain as the average price of new car hit $33,982 last month, according to J.D. Power & Associates.
Certification of used cars is already offered by manufacturers and dealers, but there's millions of cars that aren't covered.
"There's three times as many used car purchases today" said co-founder Jeffrey Schwartz. "But there's a gap between the growth in used car buyers who want a quality used car vehicle and the inability of dealers to certify their cars at scale."
Schwartz founded the company with Donny Hall, who previously created CarSure, a coverage plan for vehicle repair. The company was purchased in 2017 for an undisclosed amount by Austin-based IAS, an insurance company that last year was acquired by Canada's iA Financial Group. Schwartz formerly headed Autobytel.
Schwartz, who recalls faxing leads to car dealers in the 1990s and being told the internet would never be 'a thing," will be taking advantage of the consumer shift to online sales. This year, SureSale anticipates certifying tens of thousands of cars. It has under 25 employees and contracts inspectors in 37 states.
Like other brick-and-mortar retailers, used car dealers have seen a dramatic shift over recent years as consumers look online for better prices. SureSale could give some an advantage by providing an under-the-hood look at their inventory.
Carfax has become the standard for car buyers. SureSale is differentiating itself by offering a pre-owned vehicle certificate much like those provided by car dealers.
The report includes an inspection, title and background check along with a 5-month warranty and extended protection plans. It's free for individual users, but SureSale charges dealers with the promise that it will raise their auto sales.
The company said it will launch the service for private buyers later this year.
The concept isn't new, said Ronald Montoya, senior consumer advice editor at Edmunds. "They are just packaging it all together and making it convenient," he said. It could appeal to dealers who find it a cheaper alternative to their own inspections. But he said, he's seen similar companies come and go.
"The used vehicle industry is the largest retail segment of the U.S. economy that, surprisingly, still has major untapped potential to create an independent, gold standard brand and maximize value for both dealers and consumers," said Upfront Ventures partner Kobie Fuller in a statement.
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Here are the latest headlines regarding how the protests around the killing of George Floyd are impacting the Los Angeles startup and tech communities. Sign up for our newsletter and follow dot.LA on Twitter for the latest update.
- Disney will donate $5M to Social Justice Groups
- Blck VC group launches 'We Won't Wait' campaign
- a16z VC firm launches fund to target diverse founders
- Snap stops promoting Trump's account in its Discover feature
Disney will donate $5M to Social Justice Groups<img lazy-loadable="true" src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMzM2OTY2MC9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYzMjY2MTY2NX0._jc-luWmLRd9-UnBFZgyZJTm33I9_3T6Ssz9nZ3lkVY/image.jpg?width=980" id="7082f" class="rm-shortcode" data-rm-shortcode-id="c602ad745e2c03d3c0175cf24139e96f" data-rm-shortcode-name="rebelmouse-image" />
ABC's TV sitcom Blackish aired two "monumental and timely episodes" this week.<p>The Walt Disney company announced Wednesday that it will donate $5 million to nonprofit groups fighting for social justice, starting with a $2 million donation to the NAACP. </p><p>"The killing of George Floyd has forced our nation to once again confront the long history of injustice that black people in America have suffered, and it is critical that we stand together, speak out and do everything in our power to ensure that acts of racism and violence are never tolerated," said Disney chief Bob Chapek in a statement. "This $5 million pledge will continue to support the efforts of nonprofit organizations such as the NAACP that have worked tirelessly to ensure equality and justice."</p><p>In a statement, the company pointed to its previous social justice initiatives, including providing "millions of dollars in grants to help students from underrepresented groups make the dream of higher education a reality, including $2.5 million to the United Negro College Fund." Disney also noted that it matches employee donations to "eligible organizations" and that on Tuesday it re-aired two "monumental and timely episodes" of <em>Black-ish </em>on its ABC television networks before a primetime special titled "America in Pain: What Comes Next?" </p><p>In its quarterly earnings released last month, Disney reported nearly $40 billion in revenue in the six months to March 28, 2020. Net income over the same period was down 68% from the year prior, however, as most of the company's business units have been battered by the coronavirus pandemic.</p><p><em>— Sam Blake</em></p>
a16z VC firm launches fund to target diverse founders<img lazy-loadable="true" src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMzM2OTQ0MC9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTY1MDkwMzg3MH0.dhLyHYGgwtjLRdt65OFroB4fgSdsiZTeTSSEG88d7Mw/image.png?width=980" id="a1f14" class="rm-shortcode" data-rm-shortcode-id="7a1c9842c8f468c18e05cdfc2be667a5" data-rm-shortcode-name="rebelmouse-image" />
Ben and Felicia Horowitz will match up to an additional $5,000,000 total in any other donations.<p>One of Silicon Valley's most prominent venture capital firms <a href="https://a16z.com/2020/06/03/talent-x-opportunity/" target="_blank">announced Wednesday</a> it is launching a new fund designed for entrepreneurs who have the talent, drive and ideas to build great businesses, but lack the background and resources to do so.</p><p>In a blog post, the firm says it has been working on the fund for six months. However, the timing of the news this week is fortunate for an industry with a <a href="https://pitchbook.com/news/articles/vc-firms-have-a-diversity-problem-do-they-care" target="_blank">serious diversity problem. </a><span></span></p><p>a16z plans to fund a small group of founders in the first year, then expand after that. The initial capital will come from $2.2 million in donations from partners. Ben and Felicia Horowitz will match up to an additional $5 from other donations as well. The firm will invest in exchange for equity in the business, but all returns will stay in the fund to finance future entrepreneurs, which aims to back products from underserved communities that also have an "interesting model, niche market, and/or a little traction to indicate the promise and potential."</p><p>"We're venture capitalists, not activists," the firm said in its post. "Entrepreneurship hasn't been accessible to everyone, but the fact remains that being an entrepreneur is one of the most powerful ways to own your own future, to increase mobility across time and place, to invent new ways of doing things, and to forge a new system. As we emerge from this tragic moment, let's build.</p><p><em>dot.LA co-founder and executive chairman Spencer Rascoff is a board partner at a16z.</em></p><p><em><span></span>— Ben Bergman </em></p>
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