The auto retail veterans behind Fair, the used-vehicle leasing subscription service, continue to attract investors willing to put capital into the startup's effort to revolutionize the way consumers acquire vehicles.
Fair secured another line of credit, this time from Detroit auto lending giant Ally Financial Inc.
The new $100 million debt facility, which the companies announced last week, accounts for just a tenth of Fair's debt facility, which now exceeds $1 billion.
Fair uses its debt facility, which functions through a subsidiary, to buy vehicles for its consumer business as well as for its partnership with Uber.
As part of the deal, Ally is making an equity investment in the company, according to Fair. The subscription platform would not disclose the amount but said Ally will become a minority shareholder in Fair.
The arrangement deepens the lender's relationship with the subscription service and underscores Fair's ability to attract significant capital.
Fair — led by former TrueCar CEO Scott Painter and Georg Bauer, former head of financial services for BMW, Mercedes-Benz and Tesla's Europe/Asia-Pacific operation — launched in August 2017 and has rapidly expanded.
A large part of its growth involved winning over its toughest critics — traditional retailers.
Two years ago, Fair's website counted 700 used vehicles available through 17 participating dealerships. Today, Fair sources vehicles from nearly 4,000 franchised and independent dealers and boasts an inventory at or just below 100,000 vehicles.
Partnerships with four of the largest U.S.-based dealership groups — AutoNation Inc., Penske Automotive Group, Asbury Automotive Group and Group 1 Automotive — have helped.
"It's very rewarding to see my old industry has bought into a Fair for their consumers," Bauer told Automotive News.
The Santa Monica, Calif., company employs more than 600 people, operates in 21 states and has delivered to 45,000 customers.
Scaling operations remains a priority, Bauer said, and the subscription service has some notable investors. In addition to Ally, Credit Suisse, Goldman Sachs and Silicon Valley Bank provide the remaining $900 million in credit to Fair.
Last year, Japanese technology giant SoftBank Corp. led a $385 million funding round for Fair, which included investments from Exponential Ventures, Munich Re Ventures' ERGO Fund, G Squared, Expanding Capital and CreditEase.
