A new Atlanta startup is changing the way people finance cars and raised a $7.2 million seed round to jumpstart the direct lending platform.
Carputty, founded about a year and a half ago, is a direct lender that aims to innovate the car finance industry through increased transparency and consumer control.
Inside the deal: Kickstart Fund led the seed round. Kinetic Ventures, University Growth Fund, Aries Capital Partners and Atlanta entrepreneur John Dancu also participated. The raise brings Carputty’s total investments to $9.6 million, CEO Patrick Bayliss said.
About the company: Carputty provides people with flexible lines of credit for financing auto purchases. The platform analyzes a person’s trended credit score, income and assets, meaning it considers past, present and future information. It approves a specific line of credit, from $25,000 to $200,000, which could be used to purchase or refinance a vehicle. The Carputty Flexline credit line can accommodate multiple vehicles, so a person can have their car payments all in one place rather than juggling multiple loans. The platform also shows people how much their car is worth and projected to be worth so they can find the best time to sell.
The platform is “pro-consumer, not anti-dealer,” Bayliss said. It aims to disrupt the automotive industry by making car loans separate from car purchases, which Bayliss says removes pressure from the consumer, adds transparency to the process and saves time. Bayliss previously founded County Line Auto Group, a Connecticut-based company group of a dealership, rental, insurance advisor and car wash. Joshua Tatum, co-founder and chief product officer, is an Atlanta native who also does tech consulting and served as the director for financial technology startup SoFi.
Why it matters: Carputty is another example of local innovation in the automobile industry. Georgia is known for its automotive manufacturing, which is gaining strength in the electric vehicle market. The state is also home to dealership giant Asbury Automotive (NYSE: ABG) and Cox Automotive, a suite of companies for car dealers. E-commerce options are becoming more popular for the car-buying experience. Carputty is tackling another subset of the industry by putting the car financing process online and making it more streamlined than the traditional approach.
What’s next: This round of funding will go toward expanding the team, marketing outreach and product innovations. Carputty currently has about 25 employees and plans to expand its technology team by five to 10 people by the end of the year. The startup is focused on marketing in the metro Atlanta area right now and plans to continue expanding around the Southeast.
What they’re saying: “We’ve seen consumer feedback that says the system is broken. But there hasn’t been innovation in this space,” Bayliss said. “Our society are quick adopters of financial platforms online that are more trustworthy, more secure and an easier way to do business.”
