The company recently raised $8.6 million during a Series A round to help it grow into new markets. The round was led primarily by Accomplice and Link Ventures with Motley Fool Ventures, Gaingels, and CMFG Ventures also participating in the funding round.
This recent funding round follows a seed round worth $4.7 million from early 2019.
MotoRefi will also be adding two new board members: Rachel Holt, a former Uber executive and Co-Founder of Construct Capital, and Rob Chaplinsky, Managing Director for Link Ventures.
Kevin Bennett, CEO of MotoRefi, believes that auto loan debt is as big of a problem as student loan debt. However, most consumers don't realize they have the option to refinance their auto loans. A poll from 2017 found that around 47% of Americans knew that they could refinance their auto loans.
“People shop their home loans, while most just get their auto loans from the dealership where they bought their car, so their rates are artificially high,” Bennett said in a recent interview. “Meanwhile, credit unions can be great for auto loans but they might not have the tools to reach consumers.”
This is where the company hopes to make an impact. Bennett believes MotoRefi's platform can save the average consumer around $100 per month.
New board member Rachel Holt was one of MotoRefi's earliest investors and stated that when she was with Uber she noticed just how much auto loan debt some consumers were burdened with.
"Dealerships aren’t making money on selling cars, they’re making it on financing, Holt said. “I saw this problem and so I was looking out for startups trying to solve this problem,” she added.
The current US auto refinancing market is worth about $40 billion according to TransUnion. However, that same data indicates the market could double or triple which is why companies are attempting to inform and provide consumers with more refinancing options.
MotoRefi will expand by adding new partners and lenders and the new funds will help the company to add employees and invest more into its platform.
Just a month ago the company also launched pilot programs with Chime and Progressive to directly provide refinancing options to consumers.