M&A and VC activity
In June 2007, Chicago based Cars.com added women’s automotive site Mother Proof to its network of car sites. The Cobalt Group has acquired has acquired Cowboy Corp., AutoTown and Dealix in the past few years.
Autobytel Inc. has acquired a number of companies over the years. In August 2001, it acquired Autoweb, in June 2003, the company acquired AVV, a provider of dealership lead and sales management tools and in April 2004, it acquired iDriveonline, Inc., a provider of customer loyalty and retention marketing programs for the automotive dealers and Stoneage Corporation, an Internet automotive marketing services company and owner of the Car.com site.
Edmunds.com, Inc. an automotive information site is a privately held company whose investors include the Peter Steinlauf family, CNET Networks, Inc., Cox Enterprises, Inc., GE Pension Trust and Autologic Holdings plc.
UAA (Unified Automobile Association Club) is a Chinese online automobile services site established in March 2005 and headquartered in Beijing. The UAA is a foreign-funded club with total investment reaching $12 million.
The Cobalt Group, owner of sites like usedcars.com and Dealix.com provides automotive retailing applications and services to more than half the auto dealers in North America and nearly thirty automobile manufacturers, is funded by Warburg Pincus, ABS Capital Partners and Oak Investment Partners. The Cobalt Group had raised $92 million in 2004 in two tranches.
Seedfund, an early-stage investment fund has taken close to a 30 per cent stake for an undisclosed sum of money in Automotive Exchange Pvt. Ltd, the company behind CarWale.com an online auto classifieds site in India.
The online auto industry is in for some good times. We have seen the flourishing of the old sites and the entry of a number of new age community sites like, CarGurus, etc.
With the classifieds sections of newspapers suffering, a large portion of advertising dollars moving online, car dealers are slowly realizing the benefits of local search and online advertising. For many small dealers it increases their visibility and improves their credibility.
Automotive sites have successfully integrated community features and the ability to perform vertical search, detailed car comparison, network with other buyers, coupled with increasing safety of transactions, has resulted in more and more people researching cars and vehicles online and a rapid growth in the number of online transactions. Community features are going to further the popularity.
The increasing growth of the automotive sites is expected to attract newer players, entrepreneurs, and the VC/PE community. Though the number of sites are exploding in the space, we will see consolidation and my hunch is that old media companies (read newspapers) will use the cash in their reserves to buy some of these sites to make up for lost classifieds revenues.