Motorefi Secures $10M Funding for Auto Refinancing Expansion

Just prior to the widespread arrival of the COVID-19 pandemic in North America, the auto fintech company MotoRefi – recently securing close to $9 million in venture funding – was preparing to launch its vehicle refinancing platform to a wider audience.

CEO Kevin Bennett, along with the company’s investors, recognized the potential to serve the large number of Americans with a combined total of $1.2 trillion in outstanding auto loans. However, they did not foresee the significant increase in demand triggered by COVID-19 and the resulting economic instability.

Originating from QED Investors in 2017, MotoRefi created a platform to manage the complete auto refinancing process, encompassing rate comparison, existing loan payoff, and vehicle title transfer. The company has capitalized on two key trends accelerated by COVID-19, which have significantly boosted its business: increased acceptance of fintech solutions and a heightened focus on personal financial management.

Currently, investors are providing additional funding to enable the startup to fully leverage the surge in demand for auto refinancing services.

MotoRefi announced on Friday that it has secured $10 million in a funding round spearheaded by Moderne Ventures. Liza Benson, a partner at Moderne Ventures, will be joining the company’s board of directors.

“A considerable number of individuals are actively seeking ways to reduce their expenses,” Bennett stated, reflecting on the past year’s developments. “While auto refinancing has traditionally been a less well-known area of personal finance, interest in this option has substantially grown and accelerated throughout 2020.”

He further noted that Google searches related to auto refinance experienced an approximate 40% increase in 2020 compared to the previous year.

The company reported a sixfold increase in revenue, a tripling of its workforce to over 150 employees, and a doubling of the number of lenders available on its platform over the last year. MotoRefi successfully refinanced more than $250 million in auto loans during 2020.

“We hadn’t initially planned to raise capital twice within the same year,” Bennett explained. “However, the growth was quite apparent to investors and within the market.”

According to Bennett, the new funds will be allocated to expanding the team and broadening the company’s service offerings. MotoRefi currently operates in 42 states and the District of Columbia.

To date, MotoRefi has raised over $24 million in funding. The company previously raised $8.6 million in a Series A funding round last February, which later increased to $9.4 million. This round was jointly led by Accomplice and Link Ventures, with participation from Motley Fool Ventures, CMFG Ventures (affiliated with CUNA Mutual Group), and Gaingels. The Series A round followed $4.7 million in seed funding announced in March 2019.