Goldman Sachs Invests $45M in Auto Fintech Motorefi

MotoRefi Secures $45 Million in New Funding

MotoRefi has successfully obtained $45 million in a funding round spearheaded by Goldman Sachs. This investment arrives merely five months following a previous $10 million infusion into the fintech startup, designed to accelerate the expansion of its automotive refinancing services.

Platform Capabilities and Consumer Savings

The company has developed a comprehensive auto refinancing platform. It manages the complete loan procedure, encompassing rate discovery, existing loan payoff, and vehicle title transfer. MotoRefi asserts that its platform enables consumers to reduce their monthly car payments by an average of $100.

This savings is partially attributable to the company’s direct collaborations with lending institutions. The platform experienced consistent growth, which was further amplified by the onset of the COVID-19 pandemic.

Growth Trajectory and Loan Volume

CEO Kevin Bennett stated that MotoRefi is projected to facilitate $1 billion in loans by year-end. This represents a fivefold increase compared to the same timeframe in the preceding year.

The rapid succession of funding rounds was motivated by strong investor confidence in the company’s performance metrics and the underlying economic fundamentals of the business.

Investor Confidence and Strategic Preemption

“We hadn’t initially planned another fundraising effort so soon,” Bennett explained. “However, Goldman Sachs expressed comfort with our established relationship, proven track record, and overall business success, leading them to proactively initiate this round and accelerate the timeline.”

Expansion and Workforce Growth

MotoRefi’s platform is currently operational in 46 states and Washington, DC. The company intends to extend its availability to all 50 states by the end of the current year.

To support this expansion, MotoRefi has significantly increased its hiring efforts. The employee count more than doubled to 187 by the first quarter of 2021, compared to the previous year. Currently, the workforce has grown to 250 employees.

Recent additions include several senior executives, a new headquarters location, and a strategic partnership with SoFi. Jade Mandel, VP of venture capital and growth equity at Goldman Sachs, has joined MotoRefi’s board of directors.

Market Opportunity and Debt Rebalancing

Bennett anticipates substantial growth potential as consumers actively seek strategies to manage and reduce their debt obligations.

The U.S. auto refinance market is valued at $40 billion. However, the total outstanding auto loan debt reaches $1.3 trillion. With approximately 40 million auto loans originated annually, MotoRefi anticipates a continuous stream of potential customers.

Capital Allocation and Future Plans

The newly acquired capital, which also includes participation from IA Capital and existing investors like Moderne Ventures, Accomplice, Link Ventures, Motley Fool Ventures, and CMFG Ventures, will be allocated to further product and service development and continued workforce expansion.

Since its founding in 2016, MotoRefi has raised a total of $60 million.

Sustainable Business Model

Bennett expressed confidence that the company has reached a self-sustaining financial position.

“We’ve moved past the stage of constantly seeking capital to avoid running out of funds,” he stated. “We now have a robust and profitable business model, providing us with significant financial stability. While future fundraising may occur, it will be driven by strategic objectives rather than necessity.”