German luxury automaker BMW led a $37 million series C round of investment in technology and “car concierge” San Francisco-based startup Shift Technologies through its BMW i Ventures venture capital fund. The €500 million fund was established to invest cash and resources in companies working on autonomous driving and other auto-related services.
Shift, which operates in San Francisco, Los Angeles, and Orange County, California, combines technology with convenience for buyers looking to purchase a used car. The service is primarily aimed at millennial customers and the company says that more than 50% of its customers and 70% of customers who get loans through Shift are millennials.
Using Shift’s platform, someone wishing to sell a car is given the vehicle’s market value within two minutes and Shift takes care of the details of listing the car, arranging for test drives, and doing the paperwork to complete a sale.
Buyers receive assurance that the vehicle has passed a 200-point inspection. The company also provides free on-demand test drives, trade-ins, and car pick-ups, among other services. Shift takes care of the paperwork and can also arrange financing.
BMW i Ventures partner Christian Noske, who will be joining Shift’s board of directors, said:
“We are interested in technology companies that challenge the status quo and build products that help improve transportation options for consumers. Buying a car is one of the most expensive purchases most people ever make and BMW i Ventures is committed to making this experience not just good, but great. Shift’s proprietary technology, world-class team of engineers, and forward-thinking workforce will help the company to succeed in the used car market.”
The number of used cars on the market is expected to rise sharply this year because of the rising cost of new cars and in part to a large number of vehicles being returned as their leases expire. The significant difference between new and used-car prices — new cars average around $35,000 and used cars around $19,000 — means sales of used cars are expected to continue rising. More affordable prices for a used car are likely more attractive to millennial buyers than are much more expensive new cars, what with housing costs and student loan repayments already claiming a large part of their incomes.
Shift had raised about $74 million in prior financing rounds from investors including Goldman Sachs and Highland Capital. The current round added G2 Venture Capital and DCM Ventures along with BMW.