$425M exit: BacklotCars selling to Indiana-based auto marketplace in ‘milestone event’ for KC
September 8, 2020 | Startland News Staff
Five years after turning its ignition, Kansas City-revved BacklotCars is being acquired in a historic $425 million deal.
Carmel, Indiana-based KAR Auction Services agreed to purchase the company by the end of the year, the companies said Tuesday morning.
“KAR Global is the most innovative and progressive digital remarketing company in the world, and their entrepreneurial roots and culture are a great match for BacklotCars,” said Justin Davis, CEO of BacklotCars, a web-based, dealer-to-dealer automotive platform, calling the exit a “milestone event” for the Kansas City ecosystem.
Davis and his fellow BacklotCars’ co-founders Ryan Davis, Josh Parsons and Fabricio Solanes will maintain their positions, the companies said Tuesday.
Founded in 2014, BacklotCars employs 187 full-time employees, 90 based in Kansas City. KAR has no plans to move BacklotCars from its local headquarters — which it established in the renovated Lightwell building last fall.
Click here to learn more about BacklotCars.
Since its inception, BacklotCars has expanded its geographic footprint from the Kansas City region to now serving dealers across 46 states. It has scaled its operations and marketplace, leveraging technology to deliver upon the mission of making wholesale easy, the company said Tuesday.
After significant expansion in 2019, the company’s growth accelerated in 2020 as COVID-19 forced the automotive industry to take a digital-first approach to wholesale.
Before Tuesday’s announcement, BacklotCars had raised $50 million to date, placing it among the top five ventures on the Kansas City Top-VC Backed Companies list for the past three years. Investors of BacklotCars include Stripes, Origin Ventures, Pritzker Group Venture Capital, Royal Street Ventures and KCRise Fund.
Tuesday’s announced deal could rival news of the sale of Kansas City-based EyeVerify, which sold to Ant Financial — the payments affiliate of Alibaba Group Holding — for more than $100 million in September 2016.
“We look forward to completing the transaction and leveraging the power of our combined technology solutions and industry expertise to help our companies and our customers succeed,” Davis said.
The acquisition is expected to enhance KAR’s TradeRev auction platform and provide dealers with more choices, enhanced transparency, and access to an expanded network of buyers and sellers, the companies said.
“BacklotCars has grown rapidly in the highly competitive dealer-to-dealer space and is the perfect complement to our current capabilities and footprint,” said Jim Hallett, chairman and CEO of KAR. “I’m confident the addition of Backlot’s leadership, technology, and exceptional customer-service model will quickly benefit our combined customers, enhance KAR’s competitive position and accelerate growth for both organizations.”
Featured Business
2020 Startups to Watch
stats here
Related Posts on Startland News
Stripping Missouri’s supplier diversity goals stifles state’s prosperity potential, says women’s business advocate
Ending nearly a decade of benchmarks that helped ensure greater equity in state contracts for businesses owned by minorities and women is a move in the wrong direction for Missouri, said Jennifer Brungardt, emphasizing the coming impact of lost opportunities for underrepresented entrepreneurs. “Diversity and economic growth will be stifled without proper support from our…
Capital connector’s message to women: Your investor pool isn’t just sharks; dive in and learn to swim
When it comes to navigating the waters of capital and equity, Women’s Capital Connection angel investment network and the Women’s Business Center serve as a guide to both entrepreneurs and investors, Kelly Sievers shared. “All the education that we do and all the connections that we make, I would say that’s really the key,” explained…
Entrepreneur behind Soul of Santa aims to create Rockefeller Plaza holiday experience on KC’s east side
Tucker Lott hopes an outdoor ice skating rink at 2000 Vine — the home of Vine Street Brewing — will help solidify a new holiday tradition in the 18th and Vine entertainment district, the veteran entrepreneur said. “We wanted to create a holiday atmosphere where families could gather and have fun,” said Lott. “The entire…
Proptech startup Particle Space acquired by LA real estate marketing software firm
The acquisition of a Kansas City proptech startup by one of its first — and biggest — customers offers founder David Biga the opportunity to pivot back to his entrepreneurial roadmap, he said, reflecting on next steps once Particle Space’s technology is fully integrated into its new home. “Build, give back, build, give back,” Biga…