Automatic Brings On Strategic Investor, Adding DMS Providers

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The following post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga.

Onwards and upwards for auto industry fintech company, Automatic.

The Connecticut-based start-up, which aims to revolutionize the lending process for used car buyers, received a major boost to its growth plans with the recent onboarding of a strategic investor. This strategic partnership comes with a sizable increase to Automatic’s original salesforce — and the new salesforce, are already closing deals with independent auto dealerships nationwide.

In addition, the company is partnering with several Dealer Management System (DMS) providers. Dealerships that use different DMS software, for inventory management, can now access Automatic's financing network through their DMS. DMS is a software system specifically designed to ease the complex multiple operations of vehicle dealerships.

The addition of the strategic investor multiplies the existing Automatic salesforce and provides nationwide coverage. According to Automatic, the sales personnel involved are all highly experienced operators and work across the country.

“The group is one of the most highly trained finance and ancillary product agents in the industry,” said Thomas Ricardo, coordinator of digital marketing for Automatic. “They are a team that immediately saw the market need for this tech product.”

DMS Sign-ups Adding to Automatic Offering

Innovation in used auto finance came to a halt in 2001, Eric Burney, a used auto finance professional for the past 20 years knew about the need for Automatic. Automatic was co-founded by Burney, now the company’s CEO. Automatic is taking advantage of the huge opportunity to offer its software platform to dealers, drastically reducing the time spent to arrange financing for their customers.

With the signing up of DMS providers, too, the seamless Automatic platform can become available to an ever-increasing number of users.

Partnering with different DMSs allows for the potential to scale Automatic’s market share fairly quickly, Burney said.

DMS providers manage between 500 to 1,500 dealerships on the smaller end and up to 5,000 for bigger providers, Automatic says.

“The partners we are in negotiation with want to offer seamless financing to their dealers, hence they want to partner with Automatic,” the company said. “Dealers will now be able to manage their inventory and access Automatic’s robust platform.”

Automatic Brand Coming to Forefront as Supply Chain Tightens

While Automatic says the creation of a seamless software platform for dealers was much needed anyway because of the clunkiness of the industry, it is also true that macro trends have expedited the need for such a system.

The used vehicle market in the United States is experiencing historic price increases as supply issues and pent-up demand combine to force values higher. The squeeze on product supply issues specifically for newer cars is trickling down to greater demand for the used car market.

For example, major producers like Ford Motor Co. F and General Motors Co. GM have been discussing shortages of important components like semiconductors that could last for years.

The timing of such supply and demand issues, plus trends towards a greater desire on the part of consumers for digital purchasing, has come at a good time for Automatic.

“The rush to get into the used car market really brought our brand awareness to the forefront,” Burney said.

Automatic is currently engaged in a crowdfunding campaign that ends November 12. Its WeFunder campaign has raised approximately $1.36 million with investors committing a minimum of $100. So far, Automatic is in the top 2% of companies that have raised over $1M through reg CF.

The preceding post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. This content is for informational purposes only and not intended to be investing advice.