Motor vehicle refinance FinTech MotoRefi raised $45 million in a Series B funding round led by Goldman Sachs Asset Management, the company said in a press release on Friday (May 28). Participants in the round included new investor IA Capital and previous backers Moderne Ventures, Accomplice, Link Ventures, Motley Fool Ventures and CMFG Ventures.
The startup will use the fresh capital to continue its trajectory of accelerated growth by building out its workforce and investing in its platform.
Headquartered in Washington, D.C. and founded in 2016, MotoRefi helps people save an average of $100 each month on their vehicle payments. The startup collaborates with credit unions and other lenders to give customers a fast and easy way to save money by refinancing their car loans.
Jade Mandel, vice president of growth equity for Goldman Sachs Asset Management, said they have been “impressed” by MotoRefi’s fast expansion and its “innovative approach” to FinTech solutions in motor vehicle refinance. “MotoRefi is building a revolutionary business that helps consumers save money on what has become a major expense in their lives,” she said. Mandel will be the third woman to join MotoRefi’s Board.
MotoRefi has seen its revenue grow sevenfold, with an increase in volume from the first quarter of 2020 to 2021. The company’s workforce has also expanded 2.5 times in the same period, per the release.
“In 2020, we proved we are the go-to platform for auto refinance. In 2021, we’re scaling that offering to make auto refinance accessible to everyone, helping more people save money on their car payments,” said Kevin Bennett, CEO of MotoRefi.
Subprime car loan delinquencies are on the rise, with TransUnion in February indicating that 10.9 percent of subprime borrowers — those with credit scores below about 620 — are some 60 days behind, up about 20 basis points from January.
In September, J.D. Power research showed that online credit applications for car loans had escalated. Some 40 percent of borrowers indicated that they prefer to do this kind of business online, which could indicate a permanent shift post-pandemic.