TrueCar Could be Acquired in the Next Month, Says Analyst
Ben Bergman
Ben Bergman is the newsroom's senior reporter, covering venture capital. Previously he was a senior business reporter and host at KPCC, a senior producer at Gimlet Media, a producer at NPR's Morning Edition, and produced two investigative documentaries for KCET. He has been a frequent on-air contributor to business coverage on NPR and Marketplace and has written for The New York Times and Columbia Journalism Review. Ben was a 2017-2018 Knight-Bagehot Fellow in Economic and Business Journalism at Columbia Business School. In his free time, he enjoys skiing, playing poker, and cheering on The Seattle Seahawks. Follow him on Twitter.
The struggling Santa Monica-based TrueCar, which operates the nation's fourth largest online automotive marketplace, is ripe for an acquisition as soon as the end of next month, according to a new research note from the global financial services firm BTIG.
"Based on our inbound call volume, we believe many investors are wondering if TRUE is now an acquisition target," wrote analyst Marvin Fong.
BTIG says the answer is a strong maybe, given that TrueCar has several attributes of an appealing takeover target, including an empty CEO seat, a small group of big shareholders who own a considerable number of shares, and an attractive set of data on shoppers that would be useful to bigger companies.
BTIG thinks a takeover could happen in the next few weeks because TrueCar's board has said it expects to name a permanent CEO by March 31, which the bank believes would be seen as a sign the company is not for sale. Even if a deal does not happen soon, BTIG puts the odds at better than 50/50 that TrueCar is not a standalone company within the next 36-48 months.
"We see the merits of this idea as the overall listings space is stagnant and cost synergies could be meaningful, making consolidation a potentially value accretive route," Fong wrote.
TrueCar has been on a wild ride since serial entrepreneur Scott Painter founded the company in 2004.
It quickly became one of L.A.'s hottest startups after it appeared to be able to disrupt the half-century-plus relationship between consumers and auto dealerships. But dealerships were not about to go quietly, and in 2012, thousands of dealers exited the TrueCar network amidst complaints about bidding wars that meant they were losing money on transactions.
Still, the company went public two years later and shares have gone from a high of $25.00 to under $3 a share this week.
Michael Darrow has served as TrueCar's interim President and CEO since Chip Perry stepped down in June. Perry had been in the post since the end of 2015, when Painter departed.
In 2018, changes to Google's search algorithm caused a steep decline in TrueCar's website traffic. Just as the company was recovering from that and improving its SEO, USAA recently announced it would end its lucrative partnership, which brought in 29% of TrueCar's unit sales, in October.
USAA remains TrueCar's fourth-largest shareholder with about 9 million shares, which represents 8.5% of the stock.
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Nomad Homes, which is building a managed marketplace to allow users to not just search but also finance and complete the paperwork for residential real estate, announced Wednesday it has raised a $4 million seed round led by Comcast Ventures with participation from Abstract Ventures, Partech, Precursor Ventures, WndrCo, and Class 5 Global.
The company was started in Palo Alto by Helen Chen, a former Blackstone private equity investor who dropped out of the Stanford Graduate School of Business to start the company after she discovered how outdated property technology was in the Middle East and Europe. Nomad is now headquartered in Dubai but the engineering team is based in Los Angeles, led by Yury Velikanau, who was formerly the lead engineer at PeerStreet. The seed round will be used to grow Nomad's engineering team as well as grow its marketplace and services.
<p>"L.A. has a deep pool of engineering talent across all verticals, but especially in fintech (e.g., PeerStreet, Open Listings now Opendoor, and Tala)," Chen wrote in an e-mail. "What really stood out to us is that many of the engineers we spoke to also have a passion for real estate, which aligns well with Nomad's mission."</p><p>Other co-founders include Chief Product Officer Dan Piehler, previously a senior product manager at Addepar, and Chief Operating Officer Damien Drap, an early employee at Uber who launched and lead Uber Eats across the Middle East.<br/></p><p>"Helen and the team bring a unique blend of Silicon Valley DNA, real estate insights and on-the-ground operating experience," said Daniel Gulati, a Managing Director at Comcast Ventures. "We are excited to support Nomad's quest to deliver a superior experience for all market participants with a technology-first approach."</p><p>Nomad is focusing on Dubai and eventually other Middle Eastern and European cities because shopping for real estate is much more difficult without the MLS listings that Zillow and Redfin use to create a more user friendly experience in the United States.</p>
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Here are the latest updates on news affecting Los Angeles' startup and tech communities. Sign up for our newsletter and follow dot.LA on Twitter for more.
Today:
- Open Raven Adds Three Cloud and Security Veterans to its Team
- Tinder Tests Video Feature for Pandemic Dating
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Open Raven Adds Three Cloud and Security Veterans to its Team
<img lazy-loadable="true" src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMzM5ODY1Ny9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTYzNDcxMjM5NX0.xQkGkfQGXF98L06L8AGjttxsMAYYSOfVlFxjgPo6fIA/image.png?width=980" id="e485c" class="rm-shortcode" data-rm-shortcode-id="ec1c76ab18e8234992ef7bc99899994a" data-rm-shortcode-name="rebelmouse-image" /><p>Open Raven, a Los Angeles-based company that offers a cloud data security platform, said Thursday that it has expanded its leadership team to include three new cloud and security industry veterans. The move comes weeks after the company announced its second major round of funding.</p><p>Rob Markovich joins the company as its new chief marketing officer from his prior role as chief marketing officer at Wavefront. Alan Buckley has been hired as the senior vice president of sales, finance and operations, from his prior role as the business operations lead at Tanium. Bill Hau will be the new vice president of customer success. Hau has more than 20 years of offensive and defensive cybersecurity operations experience and previously worked at companies including Cylance, Mandiant/FireEye, IBM and McAfee.</p><p>Their hire follows <a href="https://dot.la/cloud-data-security-2646187838.html" target="_self">Open Raven's raise of a $15 million Series A round this June</a> — four months <a href="https://dot.la/open-raven-data-security-2645111465.html" target="_self">after it emerged from stealth to announce seed funding</a>. The round was led by Kleiner Perkins as well as existing investors like Upfront Ventures, bringing its total capital raised to $19.1 million.<img alt="" src="https://cts.businesswire.com/ct/CT?id=bwnews&sty=20200709005277r1&sid=web01&distro=nx&lang=en"><em>__</em></p><p><em></em><em>Do you have a story that needs to be told? My DMs are open on Twitter </em><a href="https://twitter.com/latams" target="_blank"><em>@latams</em></a><em>. You can also </em><em>email me at tami(at)dot.la</em><em></em><em>, or ask for my Signal.</em></p>Tinder Tests Video Feature for Pandemic Dating
<img lazy-loadable="true" src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMjY1Njc5NC9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYxNTgwMjc4M30.77K73_L-avsg-F23cDrsbpaatY6opyXUnhd7KLz-3QE/img.jpg?width=980" id="15305" class="rm-shortcode" data-rm-shortcode-id="500459f03dada1f31bdae9f4fe09131d" data-rm-shortcode-name="rebelmouse-image" /><p><span style="background-color: initial;">As COVID puts a pause on dating for many singles, Tinder has rolled out a new video chat feature. The dating app </span><a href="https://www.tinderpressroom.com/Tinder-Begins-Testing-Face-to-Face-Video" target="_blank">announced</a> Wednesday that users in 13 countries, including four U.S. states, can now try out "Face to Face."<br></p><p>This is part of Tinder's big sell on a feature Bumble launched last year that has become popular. The video calls "prioritize control and comfort" by prompting users to agree to a set of<a href="https://www.gotinder.com/community-guidelines" target="_blank"> ground rules</a> (keeping the interaction PG) and letting them disable the video feature at any point. You're also able to leave a report once the video ends.</p><p>"We're looking to better understand how video chat fits in with the overall journey of getting to know someone new," Tinder spokesperson Evan Bonnstetter explained in an email.</p><p>Users in Virginia, Illinois, Georgia and Colorado can meet their matches face-to-face. But the feeling has to be mutual — both parties need to opt-in before the chat switches to a split-screen video call.</p><p>Like Snapchat, the appeal of talking on dating apps lies in anonymity, for some. Plus, chatting on an app relieves the stress of giving out personal information.</p><p>As stay-at-home orders remain in place, virtual dates have become default. Will this last? A Tinder survey of users found that over half of its U.S. users have used the video date function with a match in the past month. Plus, 40% of Gen Z members surveyed who tried video dating said they'd continue using the feature "as a way to decide whether to meet IRL (in real life) in the future — even once their favorite date spot is open again."</p><p>Launched in 2012, Tinder, now boasting over 60 million subscribers, is available in 190 countries and over 40 languages.</p>From Your Site Articles
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