Car repair loan fintech DigniFi lands $14m Series A
DigniFi, a Washington-based car repair loan provider, has raised a $14 million Series A.
Backers included Texan permanent capital firm BuildGroup and Exor Seeds, the VC fund associated with €144 billion Netherlands-based holding company, Exor.
Exor is the holding company of the Agnelli family, the controlling shareholder of Fiat Chrysler, Ferrari, and Juventus.
DigniFi also landed $275 million from Neuberger Berman’s private equity arm for its auto financing platform.
Growth to date
DigniFi says it has issued $113 million in loans so far to more than 115,000 customers.
Currently, its services stretch across 4,700 active service centres. The start-up says it will use the financing to expand its network of auto service centres to another 5,000.
“Our network of auto service centres has grown by 500 locations over the last 90 days, spurred by this rising demand,” says CEO Richard Counihan.
BuildGroup’s co-founder and managing partner Jim Curry calls DigniFi “a great addition” to its “growing portfolio of modern business models”.
Customers apply for financing through the fintech’s platform. If approved, the customer chooses a service centre.
After the car repair is complete, the customer can choose a repayment plan for their loan. The loans are originated through WebBank, an FDIC-regulated bank.
Service centre partners will receive payments from DigniFi. If they’re not a partner, the customer receives a virtual prepaid card for repairs.
DigniFi’s platform covers all five profit centres of a dealership. These are financing and insurance (F&I), sales, parts and accessories, service, and collision.
Market for car repairs
The start-up cites a pre-coronavirus AAA survey which found 64% of Americans could not pay for an unexpected car repair without taking on debt.
The average car repair costs around $500 to $600 according to survey. This leads consumers to lean on credit cards or payday loans. If these credit lines are already exhausted, the repair will likely be put off.
“We have never been in a better position to serve drivers and auto shops,” says Dignifi’s CEO Counihan. “Our platform will stimulate local economies and help America recover strong.”