A month before the COVID-19 pandemic had spread to North America, auto fintech startup MotoRefi — newly armed with nearly $9 million in venture capital — was preparing to bring its refinancing platform to the masses.
CEO Kevin Bennett, and the investors behind the company, saw the opportunity to service Americans who collectively hold $1.2 trillion in auto loans. What they didn’t anticipate was the sudden uptick in demand fueled by COVID-19 and the uncertainty and chaos that the pandemic created.
MotoRefi, which was born out of QED Investors in 2017, developed an auto refinancing platform that handles the entire process, including finding the best rates, paying off the old lender and re-titling the vehicle. The company has benefitted from the convergence of two trends sparked by COVID-19 that has turbocharged its business: an accelerated adoption of fintech across the economy and growing attention toward personal finance.
Now, investors are pouring more money into the startup to help it make the most of the spike in demand for auto refinancing.
MotoRefi said Friday it has raised $10 million in a round led by Moderne Ventures. Liza Benson, a partner at Moderne Venture, will join the board.
“Many people are looking around saying how can they save money?” Bennett said, commenting on the events of the past year. “And while auto refinance historically is in a relatively low awareness category of personal finance, that interest has really grown and accelerated through 2020.”
For instance, Google searches for auto refinance increased about 40% in 2020 over the previous year, he added.
The company said its revenue rose by sixfold, its workforce tripled to more than 150 people and the number of lenders on its platform doubled over the past year. MotoRefi said it refinanced more than $250 million of auto loans in 2020.
“We actually weren’t planning on raising twice in a year,” Bennett said. “But the growth had been pretty noticeable from the investor standpoint in the market.”
That new capital will be used to hire more employees and expand its offerings, according to Bennett, who noted that MotoRefi now operates in 42 states and Washington, DC.
MotoRefi has raised more than $24 million to date. The company raised $8.6 million last February in a Series A funding round. That round, which would later grow to $9.4 million, was co-led by Accomplice and Link Ventures. Motley Fool Ventures, CMFG Ventures (part of CUNA Mutual Group) and Gaingels also participated in the round. The Series A round followed $4.7 million in seed funding that MotoRefi announced in March 2019.