Top Automotive Deals of 2020

Let’s now turn to the largest and most important automotive technology deals of 2020 and put them into context. Counting downwards:


Deal #10: AutoList acquired by CarGurus

Automotive classified site AutoList was acquired by CarGurus for an undisclosed amount -- to add both incremental users and consumer audience to help fortify CarGurus’ position as market leader.


This may have been a small deal by size, but was the first acquisition by CarGurus, and signaled their interest in inorganic growth. CarGurus would execute a much larger acquisition later in the year...but we’ll get to that transaction in a bit.


Deal #9: TrueCar divesting ALG to J.D. Power

At number 9, we have TrueCar divesting the ALG business to J.D. Power for $135 million dollars.


TrueCar bought ALG, which provides residual value forecasting and other analytics services, back in 2011 from DealerTrack.


In August, J.D. Power CEO Dave Habiger said ALG will complement Power's existing data and analytics tools and valuation expertise.


Both JD Power and AutoData now sit under global Private Equity player Thoma Bravo, who seems to be executing a strong thesis around automotive data players.


It’ll be interesting to see how active Thoma Bravo and their JD Power platform are in 2021.


Deal #8: Hearst’s acquisition of BringATrailer

At number 8, we highlight one of my absolute favorite websites -- as Hearst, the parent company of the Car and Driver and Road & Track brands, acquired BringATrailer.

If you love cars, like I love cars, there’s no better site out there than BringATrailer.com. That daily list of new cars and auctions ending soon is my favorite morning email to read.


Bring A Trailer has set the bar for building a community around a passion point. What co-founders Randy Nonnenberg and Gentry Underwood have developed is truly special, and what they deliver to their audience is so much more than transactional. They’ve built a community, developed trust and have become an invaluable part of the automotive landscape.


Thank you BringATrailer for feeding my addiction each and every day!


Deal #7: Vroom’s acquisition of Vast

The deal, announced late this year, is worth approximately $120 million dollars, and is expected to close in January 2021.


CarStory provides artificial intelligence-based analytics and digital services to the auto retail industry with the aim of providing the most complete accurate view of predictive market data.


Vroom chief executive officer Paul Hennessy says that the addition of CarStory will strengthen and extend the reach of the company’s ecommerce platform.


Deal #6: Vroom and Shift going public

Carvana’s soaring market capitalization has been a result of executing a brilliant consumer experience, as well as a COVID-inspired interest in online automotive shopping experiences. The combination of Carvana’s market cap, as well as a COVID-inspired migration of consumers to ecommerce in general, helped to fueled the public offerings of both Vroom and Shift Technologies in 2020.


Deal #5: IHS Market selling to S&P Global

At number 5, we have the largest deal of the year by size, with IHS Markit selling to S&P Global in an all-stock transaction that values IHS Markit at an enterprise value of $44 billion, which includes $4.8 billion of net debt.


S&P Global and IHS Markit explained that their unique and highly complementary assets will leverage cutting-edge innovation and technology capability, including Kensho and the IHS Markit Data Lake, to enhance the customer value proposition and provide the intelligence customers need to make decisions with conviction.


This is a big deal for the automotive data space, as IHS Markit owns the old R.L. Polk business, as well as Carfax and AutomotiveMastermind.


Deal #4: BackLot Cars’ sale to KAR Global

At number 4, we have a really big transaction in the wholesale auction space: BackLot Cars’ sale to KAR Global. KAR Global reached a deal to purchase BacklotCars, an online dealer-to-dealer wholesale platform, for $425 million.


This deal augments what is already a number of digital marketplaces under KAR, which has purchased such entities as TradeRev, DRIVIN and CarsOnTheWeb in recent years, and acquired OPENLANE about a decade ago.


The addition of BackLot Cars to TradeRev will help them compete better against ACV Auctions, which is rumored to be going public within the next month.


The wholesale auction space is near and dear to my heart, and a hot space currently -- and I love seeing some of these big deals happening in the B2B marketplace segment.


Deal #3: Tekion is now valued at over $1 billion

At number 3, we have Tekion raising $150 million dollars, and now valued at over $1 billion. This year’s Series C round was led by global PE player Advent International.

Other investors in the latest round were Index Ventures, Exor (which is the holding company of Fiat Chrysler and Ferrari), Airbus Ventures, and FM Capital.


Tekion is aiming to solve the issue of technology fragmentation that has plagued the industry for decades. With its modern cloud-based platform complete with a centralized accounting system built on a secure data platform, Tekion says dealers can access their company’s data from anywhere while also providing seamless access to vendors via its set of APIs.


Tekion has the two biggest SaaS companies in the space clearly in its sites: CDK Global and Reynolds & Reynolds.


Tekion will definitely be a disruptive force in the industry for us to keep our eyes on.


Deal #2: CDK Global’s divestiture of their international operations

At number 2, we have a deal that is going to fuel some additional M&A in the space, as CDK Global divests their international operations for $1.45 billion to private equity firm Francisco Partners.


The Chicago-based company says it will focus on its core North American operations and repay debt as it considers future capital investments.


CDK's international business, has operations in Europe, Asia, the Middle East and South Africa.


The sale is expected to close in the third quarter of its 2021 fiscal year, and will add over $1 billion dollars to CDK’s war chest for acquisitions. It’ll be interesting to watch what they decide to acquire as a result of this strategic move.


Deal #1: CarGurus’ acquisition of CarOffer

CarGurus, a leading global online automotive marketplace, late last year announced it entered into a definitive agreement to acquire a 51% interest in CarOffer at an enterprise valuation of $275 million dollars, with the ability to buy the remaining equity interest in the company over the next three years.


CarOffer is an automated instant vehicle trade platform that is disrupting the traditional wholesale auction model with technology that enables dealers to bid, transact, inspect and transport seamlessly. The acquisition will add wholesale capabilities to CarGurus’ portfolio of dealer offerings, creating a complete and efficient digital solution for dealers to sell and acquire vehicles at both retail and wholesale. The company noted that the expansion to wholesale is a key component of CarGurus’ overall platform strategy, which also includes acceleration of a robust digital retail offering for dealers and consumers.


This deal supports my evolving thesis of the blurring of lines between wholesale and retail, and this is a great example of this evolution in the space.


Congratulations to Bruce Thompson and the CarOffer team for what might both be the fastest creation of wealth and the fastest exit in the industry.


Honorable Mention: Waymo raising $3.0 billion

You sometimes hear about startups raising money at a billion-dollar valuation. But how often do you hear about startups ACTUALLY RAISING over a billion dollars?


Well, it happened early last year, as Alphabet’s self-driving car company Waymo raised a whopping $3.0 billion in their first external funding round.


The round was led by Silicon Valley investment firms Silver Lake and Andreessen Horowitz, as well as AutoNation -- who disclosed that they invested over $50 million in Waymo.


The external funding is a sign that some of Alphabet’s “Other Bets” companies like Waymo need much more capital than Alphabet is willing to provide on its own. Most “Other Bets” companies are funded through revenues generated by Alphabet’s cash cow Google, which makes most of the company’s profits thanks to its dominant digital ads business.


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