American Honda has led a $15 million, Series A financing round in Modal, an e-commerce platform for dealers formerly known as Drive Motors, that has seen a surge in growth this year.
Modal founder and CEO Aaron Krane said that since the onset of the coronavirus pandemic, the company has seen a "major spike" in demand, including a 700 percent increase in customers using the platform.
"In half a year, we experienced a growth rate that we'd be bragging about if it happened in two years," Krane said.
The new funds will go toward scaling Modal's team as it looks to enhance e-commerce capabilities and improve online transactions and customer experiences. Krane said the company nearly tripled its employee count to about 50 since the onset of the pandemic and is now on its way to "at least" doubling that.
Money also will go toward an increase in marketing. "For the vast majority of our five years, we've had a two-person sales team and basically $0 in outbound marketing," Krane said. "Yet, we've managed to get this far."
San Francisco-based Modal launched in 2015. American Honda has partnered since 2018 with the company, which has created branded online-buying tools for the Acura and Honda brands.
Asked whether other automakers are investors in the company, Krane said, "Not yet." But he said the partnership with American Honda showed that Modal could launch a national e-commerce program with an automotive brand.
"Now we have a playbook," he said. "We not only have a product, but we have a national operating playbook, and we think those two things must be of value to some other car brands."
Its e-commerce platform has been certified with several other auto brands, such as Toyota, Nissan, Mercedes-Benz, Porsche and Subaru. The company has about 1,000 dealer customers in the U.S.
