Five years after turning its ignition, Kansas City-revved BacklotCars is being acquired in a historic $425 million deal.
Carmel, Indiana-based KAR Auction Services agreed to purchase the company by the end of the year, the companies said Tuesday morning.
“KAR Global is the most innovative and progressive digital remarketing company in the world, and their entrepreneurial roots and culture are a great match for BacklotCars,” said Justin Davis, CEO of BacklotCars, a web-based, dealer-to-dealer automotive platform, calling the exit a “milestone event” for the Kansas City ecosystem.
Davis and his fellow BacklotCars’ co-founders Ryan Davis, Josh Parsons and Fabricio Solanes will maintain their positions, the companies said Tuesday.
Founded in 2014, BacklotCars employs 187 full-time employees, 90 based in Kansas City. KAR has no plans to move BacklotCars from its local headquarters — which it established in the renovated Lightwell building last fall.
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Since its inception, BacklotCars has expanded its geographic footprint from the Kansas City region to now serving dealers across 46 states. It has scaled its operations and marketplace, leveraging technology to deliver upon the mission of making wholesale easy, the company said Tuesday.
After significant expansion in 2019, the company’s growth accelerated in 2020 as COVID-19 forced the automotive industry to take a digital-first approach to wholesale.
Before Tuesday’s announcement, BacklotCars had raised $50 million to date, placing it among the top five ventures on the Kansas City Top-VC Backed Companies list for the past three years. Investors of BacklotCars include Stripes, Origin Ventures, Pritzker Group Venture Capital, Royal Street Ventures and KCRise Fund.
Tuesday’s announced deal could rival news of the sale of Kansas City-based EyeVerify, which sold to Ant Financial — the payments affiliate of Alibaba Group Holding — for more than $100 million in September 2016.
“We look forward to completing the transaction and leveraging the power of our combined technology solutions and industry expertise to help our companies and our customers succeed,” Davis said.
The acquisition is expected to enhance KAR’s TradeRev auction platform and provide dealers with more choices, enhanced transparency, and access to an expanded network of buyers and sellers, the companies said.
“BacklotCars has grown rapidly in the highly competitive dealer-to-dealer space and is the perfect complement to our current capabilities and footprint,” said Jim Hallett, chairman and CEO of KAR. “I’m confident the addition of Backlot’s leadership, technology, and exceptional customer-service model will quickly benefit our combined customers, enhance KAR’s competitive position and accelerate growth for both organizations.”