$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
Emerging esports org sets sights on sustainability, says it’s leveling up with industry veterans
A new esports organization has hit the ground running — and winning — less than six months since its founding, according to its Kansas City co-founder. M80 is set up for sustained success not just because the organization’s Valorant and Rainbow Six teams already boast one championship apiece, Nate Schanker said, but also thanks to…
How a Bonner Springs-based design firm turned a napkin sketch into this state-of-the-art camper
Whether a user is 51,000 feet in the air, or traveling across the Rocky Mountains on a camping trip, Infusion Design is focused on designing spaces that perform at the highest level for what a person needs and desires, said Sean Elsner. The company was always meant to stand out from the competition, the Infusion…
These two Small Biz of the Year finalists are among the half-dozen KC firms honored as Inc.’s ‘Best Workplaces’
A workplace in the era of talent shortages and a hyper-competitive jobs market is only as good as its ability to meet employees’ nuanced needs, said Melea McRae, a top founder whose marketing company was among six Kansas City firms selected for Inc. magazine’s Best Workplaces list. “Through our un-agency business model, we’ve built a…
PayIt goes outdoors, acquiring sportsman tech startup, Nashville hub for its expanded footprint
A newly announced deal to acquire Nashville-based conservation tech provider Sovereign Sportsman Solutions (S3) is expected to expand PayIt’s govtech solutions into the world of outdoor recreation — making it easier for hunting, fishing and boating enthusiasts to obtain needed licenses and permits. The strategic acquisition — subject to customary closing conditions and set to…