LOS ANGELES — Scott Painter’s new Fair car-leasing app announced on Friday that it’s closing a new funding round led by BMW iVentures and includes investments from Penske Automotive Group and other investors.
The startup also announced it has raised nearly $1 billion in debt funding from a group investment banks that traditionally back auto debt portfolios, and from a Sherpa Capital-led entity that is being set up to fund innovative transportation models like Fair’s flexible ownership model.
“It’s clear that technology is transforming how we buy and own our cars, and the consumer is the winner — with simple, more flexible, and more cost-effective options than ever before,” said Painter. “Fair is on the forefront of making personal mobility more accessible for a new generation of customers.”
Let by Painter and auto finance legend Georg Bauer, Fair is bringing the all-digital transaction into the auto space into the auto space. Fair is designed to free consumers from the long-term commitment and higher cost of traditional ownership. The platform approves customers for a car with a driver’s license and bank account before having them sign for it through Fair’s mobile app.
According to the company’s announcement, Fair represents a strategic investment opportunity for manufacturers like BMW because its technology-driven flexible-ownership solution benefits dealers like Penske Automotive Group and customers alike.
“Fair offers a completely new customer experience,” said Ulrich Quay, BMW I Ventures managing director. “The company allows users to access vehicles without a fixed term. This appeals in particular to younger generations who want more flexible usage models.”
Painter said the Fair model relies on dealers as ongoing operational partners, which is why it made sense as an investment for Penske, dealer group officials said. Painter went on to say that Penske’s physical infrastructure will serve as a foundation to enable Fair’s flexible model.
“Penske is committed to be on the leading edge of technology, and our investment with Fair reflects that commitment,” said Penske President Robert Kurnick. “The potential appeal of the Fair app to consumers is compelling while keeping our company at the forefront of bringing mobility solutions to the marketplace.”
The following are some examples of the unique offerings Fair is coming to market with:
- In-App Everything: By simply scanning their driver’s license, linking a bank account, and signing in the app, Fair customers can order a ready-to-pick-up car from anywhere in minutes, get approved for financing, and pay the exact payment they want.
- Total Flexibility: Fair gives customers the freedom to drive their car for as long as they want, and turn it in with just five days’ notice. Fair accomplishes this by buying the car on a user’s behalf when they order it on the app, which frees the customer from a long-term financial commitment and unlocks Fair’s flexible model.
- All-In-One Monthly Payments: Fair combines practically all of a car’s ongoing costs into a customer’s monthly payment, including a limited warranty, routine maintenance, and roadside assistance. Customers can even add insurance with only a few clicks.
- Guaranteed Prices: Fair uses artificial intelligence to analyze pricing data, and only offers cars it identifies as great deals. In addition, Fair guarantees a customer’s monthly payment won’t exceed that of a comparable loan or lease.
“In addition to Fair’s obvious benefit from customers, we believe our app will be a critical tool for dealers handling the rising flow of high-quality lease returns we expect over the next several years,” said Bauer, who serves as Fair’s president. “Enabling this process with digital capabilities creates an amazing opportunity for consumers, and helps build brand loyalty for automotive brands.”
Fair plans to grow its presence from Los Angeles to the rest of California by the end of 2017, and to other select markets nationwide through 2018.