In our digitally connected lives, we want things to be simple, on demand, and flexible. The car buying or leasing experience has been anything but that with rigid terms that do not support a modern lifestyle coupled with arcane financing options. Enter Fair, which makes buying or leasing your next car as easy as placing a Starbucks order on your phone. This platform revolutionizes the global consumer automotive market through its mobile app that allows you to shop for cars and drive it for as long as you want with financing options embedded into the app. The cars come with a warranty, roadside assistance, routine maintenance, and you can even add in insurance with a few clicks. Need an SUV for the winter and convertible for the summer? Not a problem. Fair redefines what it means to be a driver…
LATechWatch interviewed the innovative founder Scott Painter, a true domain expert and pioneer in the car buying space, to learn more about how Fair has changed how we view car acquisition and ownership and the company’s recent massive round of funding, which brings its total equity funding raised to over $450M across three rounds along with another $1B in debt finance.
Who were your investors and how much did you raise?
We raised $385M of equity in a Series B led by Softbank and with investments from Munich Re Group, G Squared, CreditEase, and Exponential Ventures.
Tell us about the product or service that Fair offers.
Fair is an app that puts the entire end-to-end process of getting a car on a customer’s phone. Users scan their license to shop pre-owned cars with all-in monthly payments they can afford, sign for the one they want with their finger, pick up their keys and drive it for as long as they want—with no long-term debt or commitment, or even physical paperwork.
What inspired you to start Fair?
I’ve founded a number of innovative companies in the automotive space, including CarsDirect.com and TrueCar. And while each of them has represented an important improvement in the automotive customer experience, I’ve always had my eye on the moment when technology and industry conditions would combine to allow me to address every layer of the process.
With Fair, getting a car can now be as simple as the countless other digital transactions modern consumers make on their phones—from streaming a song on Spotify to ordering a pizza on Uber Eats.
With Fair, getting a car can now be as simple as the countless other digital transactions modern consumers make on their phones—from streaming a song on Spotify to ordering a pizza on Uber Eats.
How is Fair different?
Most other digital platforms in the automotive space can show you a car you might want to buy, but still leave you going to a dealership to buy it and finding a third party to finance the purchase. Fair completely eliminates the need for financing by buying the car on the customer’s behalf when they order it on the app and then essentially leasing it to them on an open-ended basis for as long as they want it. This way, they can complete all the steps of getting the car right in the app—from scanning their license to get approved for a range of monthly payments they can afford, signing for the car they want with their finger, and scheduling a convenient pickup.
What market is Fair targeting and how big is it?
We are tackling the global consumer and ridesharing automotive market. Put simply, we want to be the way that all people around the world get cars—whether they’re a parent, student, soldier or an Uber driver. We’re giving all these customers something that has never before been available: absolute flexibility for an affordable, all-in monthly payment that includes a limited warranty, routine maintenance, roadside assistance, and even optional Fair insurance.
What’s your business model?
Fair is literally the first major innovation in auto finance since the advent of leasing more than 50 years ago. Our business model is to offer the world’s modern consumers a flexible, simple and fair alternative to a car loan or lease that looks like all the other transactions they make on their phone.
What was the funding process like?
As a capital-intensive endeavor with some pretty ambitious goals, we made fundraising a pillar of our business model from the very beginning. As a result, we developed relationships with most of our investors at a fairly early stage and used the round as an opportunity to cement mutual opportunities we’d been discussing with them for a long time. For a round this big, it was actually pretty straightforward. We’re lucky to have investors and partners that understand exactly what we’re doing and see how it complements their other investments in the FinTech sector.
What are the biggest challenges that you faced while raising capital?
Honestly, it’s to simply communicate all the value propositions that our solution offers to both our conventional and ridesharing customers. Initially, we get the “it sounds too good to be true” thing a lot. Fortunately, SoftBank and other institutional investors making the biggest bets in mobility could clearly see what we’re trying to do and came on board pretty eagerly.
What factors about your business led your investors to write the check?
Our investors recognize that we’re not out to create an incremental improvement in the industry. We’ve literally built a new way for customers to drive the car they want for as long as they want, and this touches all layers of the mobility total addressable market—from retail to maintenance to insurance and beyond. For our customers, Fair is one-stop shopping for practically all of their mobility spend, and that’s a gigantic opportunity that our investors totally understand.
We’ve literally built a new way for customers to drive the car they want for as long as they want, and this touches all layers of the mobility total addressable market—from retail to maintenance to insurance and beyond. For our customers, Fair is one-stop shopping for practically all of their mobility spend, and that’s a gigantic opportunity that our investors totally understand.
What are the milestones you plan to achieve in the next six months?
Having achieved 10x growth in 2018, we plan to continue a massive scaling of our team and operations over the next six months that includes a world-class brand campaign and continuing to push into new markets across the country and world.
What advice can you offer companies in Los Angeles that do not have a fresh injection of capital in the bank?
Simply put, the capital needs of your business should always be a primary focus. Don’t ignore it or think it will take care of itself. You can have the most revolutionary solution your industry has ever seen, but that needs to be constantly communicated to potential investors and partners. You cannot afford to operate in a vacuum.
Where do you see the company going now over the near term?
We plan to be a global brand by the end of 2019.
What is your favorite restaurant in LA?
I have a lot of favorites, but Ivy By The Shore in Santa Monica has become my de facto haunt due to its proximity to our offices.
