A Buffalo-based software company for auto dealerships is raising a pre-seed round.
SelectFI, founded this year, recently raised $1.985 million as part of a larger pre-seed round that’s targeting $2.5 million at a $10 million post-money valuation.
The startup’s software platform is an auto dealership regulatory compliance and financing pre-qualification tool that aims to help dealerships help customers with financing quickly, more accurately and in greater compliance with Federal Trade Commission fair lending practices.
Launch NY provided $175,000, with $100,000 coming from Launch NY Seed Fund II LP, a for-profit limited partner fund, and $75,000 from the organization’s nonprofit seed fund, Launch NY Seed Fund LLC.
The remainder raised so far came from family and friends.
The funding gives the startup about 24 months of runway to cover operating costs as it focuses on expanding customers within the western half of New York state, according to Matthew Dorn, CFO. SelectFI, which employs 11, has eight customers on the platform and aims to grow to 50 to 100 clients within the next 12 months.
He estimated there’s about 400 dealerships in this half of the state.
“The reason we’re really focused on this half of the state right now is because we built out our sales team very intentionally,” he said. “Instead of training sales professionals to adapt to this industry, we went out and recruited some of the top indirect lenders focused on buying auto loans from dealers in this half of the state.”
The team also wanted to focus first on the geographic region where its staff could be there physically to make sure its platform is integrating into dealerships’ processes.
SelectFI’s office is at 360 Delaware Ave., Buffalo.
The startup’s executive team has decades of experience in various industries.
• Founder Tom Vullo has been in the auto industry for over a decade.
• Dorn was a CPA for several years and spent the last decade developing power plants with different partners, which included acting as CFO and raising funds.
• Drew Dorn, Matt’s brother and COO of SelectFI, is an engineer who had a tech-enabled smart grid energy business that he sold to a private equity fund. He was also involved in the power plant development with Matt.
• Chris Laczi, CMO, was previously vice president of marketing at Life Storage, his employer for the last 25 years.
“We’re solving some difficult problems facing dealers, exasperated in the current market,” Drew Dorn said. “It’s more difficult now than it’s been in a long time to originate an auto loan. You really need smart software to help you do that.”
SelectFI is the 12th local company to acknowledge a private, growth-oriented round of funding this year. The list includes Azuna ($3 million), Immunaeon ($600,000), Latte ($100,000), Aerovec ($178,000), CleanFiber ($6.7 million), HELIXintel ($11 million), Arbol ($350,000), CaHill Tech ($250,000), FoodNerd ($1 million), LenderLogix ($500,000), Diadem Capital ($115,000) and SelectFI ($1.985 million).
