Caribou, a Washington D.C.-born fintech specializing in auto refinancing, has consolidated it offices to one location in Denver as it tries to rebound from a shift in the car sales market.
Pandemic-related changes in its workforce, as well as a major downsizing tied to the Federal Reserve's interest rate hikes in 2022 and 2023, led the company to shutter its 22,000-square-foot headquarters in Washington D.C. on June 30.
Caribou's downtown Denver office is now the company's headquarters and only physical location, with other employees working remotely, a spokesperson said this week.
The company's move comes less than a year after Caribou brought in a new CEO, former Groupon executive Simon Goodall, to replace founder Kevin Bennett, to lead a turnaround of the struggling company.
Initially known as MotoRefi — it changed its name in late 2021— the company grew rapidly in its first five years, culminating in a whopping $115 million Series C raise in May 2022 that vaulted it to unicorn status.
It quadrupled revenue in 2020 and again in 2021, as borrowers took advantage of low interest rates to refinance existing car loans at more favorable terms. That same year it began looking for a second headquarters in Denver, founder and then-CEO Kevin Bennett said, driven by the lower cost of living and talent in the Colorado capital.
Nearly half its employees were based in its Denver co-working space at the time. By mid-2022, Caribou's total employee headcount had swelled to 500, from 150 just two years earlier, and Bennett was optimistic that all would continue.
It settled its Denver operation at 717 17th St., in the 29-story Johns Manville Plaza building.
Around that time, the Fed was issuing a series of 11 interest rate hikes in a bid to tame inflation. Auto refinancing activity slowed sharply.
Over multiple rounds of layoffs, Caribou's headcount shrunk to under 200 and by last September Bennett was out as CEO, though he has remained on Caribou's board of directors.
“When interest rates went up, the ability for consumers to save on refinancing reduced,” Goodall said in a recent interview.
Goodall, who works remotely from Chicago, has spent of the past 10 months trying to reverse the slide, and it's helped that the Fed hasn't raised rates since July 2023. Refi activity is picking up and the company, whose backers include Alexandria fintech venture capital firm QED Investors, has started hiring again, adding technology, sales and marketing staff, Goodall said.
“Now that [rates have] stabilized, we’re growing and serving more and more customers year-over-year,” said Goodall, though he declined to disclose revenue figures. Caribou currently offers rates as low as 5.99% on a 36-month loan. Most of its customers have credit scores of 640 or above, the company said.
Goodall was also tasked with cutting expenses and consolidating offices should go a long way toward reducing overhead.
Challenges remain for the firm, not the least of which is that interest rates remain at their highest levels in about two decades. Another big challenge, Goodall acknowledged, is that Caribou is hardly a household name.
“There are 100 million consumers with auto loans in the U.S. today,” Goodall said. “We believe there is an opportunity for a huge number of those to save money in their car payments, and very few know about it.”
Caribou has beefed up its marketing team to help raise awareness of the brand.
Caribou also onboarded a new chief financial officer, Tim Gurba, the former CFO of Rhino, a fintech offering financial products for renters. Gurba is based at Caribou’s Denver office.
Caribou has raised more than $190 million in its lifetime. Goodall said it's not actively fundraising at this time.
Fintech investment has fallen somewhat out of favor in recent years, with global investment dipping to a five-year low in 2023, according to data from KPMG. But there are signs of a rebound, and industry experts recently told Axios that M&A activity is up slightly from last year and poised to pick up even more.
While an exit isn’t on Caribou’s radar, Goodall said working on improving the core business will help create options for the firm down the line.
“You build a phenomenal business, then investors are attracted to do that," he said.
