Peter Thiel-backed auto commerce startup Drive Motors has a new name and $5M in capital
Not that long ago, visiting the website of an auto dealership was a little like going to a store without a cash register. The retailer’s website might list all the cars, trucks and SUVs in its inventory, but there would be no way to actually buy one online.
A digital commerce startup called Drive Motors jumped in to fill that void. Unlike Carvana and Shift and other online used car startups that have emerged on the scene, this company is providing the “buy button” for dealerships and automakers by creating a native transaction layer within their existing webpages and stores.
Now, the three-year-old company is flush with a fresh injection of capital, high-profile investors and a new name that founder Aaron Krane says better reflects its broader vision and business plan.
The startup, now called Modal, has raised $5 million in capital from new investors, including Peter Thiel, Japanese dealer conglomerate IDOM, and Ally Ventures, the investing arm of national auto lender Ally Financial.
The company started small, first landing local dealerships in California as customers of its real-time financing and digital commerce platform. Today, its customers include auto brands and some of the largest dealer groups in the country. In 2018, the startup saw its online monthly volume per store double to more than $1.8 million per month, and more than $10 million per month for top-performing individual stores.
That transaction layer is still the core feature of the company’s business, Krane told TechCrunch. Modal has added several new features since its last funding round, including real-time financing, digital documents and in-store point of sale.
Krane initially landed on the name Drive Motors because it sounded relevant to the auto dealerships he wanted to win over and not the Silicon Valley tech world where he had come from. (Krane founded Drive Motors after selling his fantasy sports startup Hitpost to Yahoo, and becoming an entrepreneur-in-residence at Khosla Ventures.)
The new name and capital just better reflects its broader strategy, he added. Krane landed on the name Modal because it embodies the company’s primary mission of delivering transactions within someone else’s experience.
“We want to be invisible, we want to be a fully self-contained embedded feature within a car brand’s vehicle page, or a car retailer’s vehicle page,” Krane said. “We don’t want to change the context on the buyer at all; that’s a philosophy that starts at the top and penetrates all the way down even the smallest decisions in our company.”
That notion of transparency and self-contained interactions led Krane to the new name because “modal,” in software terminology, means a self-contained user interface that is overlaid on top of an existing application page and keeps that existing application page in full view the whole time.
The new name also hints towards where the company is headed.
“The platform starts with just creating accessibility to a digital transaction, but it becomes the ultimate channel to introduce an entire ownership operating system, which can span everything from the more contemporary mundane automotive needs like servicing, all the way through introducing the most far out mobility or connected vehicle features,” Krane said.