Fair, a short-term and flexible auto leasing company worth around $1.2 billion, recently announced a new acquisition of Canvas, a short-term car leasing company. Canvas was previously owned by a division of the car manufacturer Ford as a way to offers leasing and financing to dealerships.
While the cost of this acquisition wasn't reported, Co-Founder of Fair Scott Painter stated that Ford will be offered an equity share in the company.
Currently, Fair sits at around 45,000 users within the United States whereas Canvas never expanding to anything close to that size with around 3,800 subscribers in only three markets. Canvas also wasn't competing as directly with Fair, offering only a minimum three-month lease compared to Fair's one month lease. The average lease, however, according to Painter, was around 12 months for ride-sharing and 18 months for regular users.
Canvas will keep running their business, but as the months roll on their operations will be converted over to Fair's branding. All Canvas leases will be changed over to Fair ones once the leases are ready to be renewed.
Ford has said that don't intend on investing into Fair and Fair currently is expected to announce additional debt funding. The company has raised millions through debt and equity funding to help them grow into new markets and purchase more inventory.
Fair will also be retaining Canvas' current staff, technology, and overall business. Their operations will stay in San Francisco and help Fair within that market.
This purchase follows a few others as Fair recently purchased the leasing company Xchange Leasing and the rental car company Skurt.
Canvas has already had a busy history of acquisitions. Founded as ZephyrCar with a focus on providing vehicles for ride-sharing services like Lyft and Uber, it soon rebranded to Breeze and invested more into leasing for ride-shares. When companies like Uber looked into other choices for car leasing, Uber happened to choose Xchange Leasing, the company was forced to shut down. It was then that Ford decided it a ripe time to purchase the company, rename it Canvas, and become a car leasing company for the Ford brand.
“Canvas’ mission is to provide customers with flexible access to the vehicle of their choice for an affordable monthly payment,” said Ned Ryan, CEO of Canvas, in a statement. “Our strong synergies with Fair make this a natural fit.”
Ford's purchase of Canvas was a way for the vehicle maker to venture into the changing future of car ownership. Despite Canvas now being sold off to Fair, Ford's share of Fair will keep them apart of that change according to Painter.
“Canvas built an impressive business and we learned a lot about subscription services, fleet management and the technology that underlies both,” said Sam Smith, Executive Vice President of Strategy and Future Products at Ford Credit. “We are proud of the work that was done in support of Canvas and we wish the entire team the best of luck.”
“I think if you’re a carmaker today, you have to think about how the world is changing and how to serve consumers, given the rise of smartphones and the changing business models of the automotive industry,” said Painter.
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