Auto fintech investment surges 70% in 2024

Venture capitalists pumped $2.3 billion of capital into auto fintechs in 2024, up $1 billion year over year and just shy of Auto Finance News ’ $2.4 billion prediction. Fintech funding — on the rebound after plunging 64% in 2023 — is still lagging the $3 billion pace notched in 2021 and 2022, according to AFN ’s analysis of public deals. In all, 37 auto fintechs reported capital infusions last year, compared with 23 in 2023. Average deal size ticked up 19% YoY to $62.2 million, though the larger deals were mostly frontloaded in the first half of the year. Of the $100 -million-plus investments recorded last year, seven of 10 occurred by May. Subscription fintech investments top $300M Swiss car-subscription platform Carvolution nabbed the largest investment last year — a $219 million capital infusion from U.K. bank Barclays and a mezzanine facility from New York investment firm Waterfall Asset Management . Carvolution earmarked the funds to expand its vehicle fleet and accelerate growth. With Carvolution, subscription companies FINN , Planet42 and Leasy combined to secure $372.8 million of investments last year, at a time when some players were exiting the space. By comparison, five subscription fintechs snared a combined $410.2 million of capital infusions in 2023. German car subscription platform FINN landed a $110 million investment in a series C round led by Planet First Partners , a European investment firm focused on sustainable companies. The round increased FINN’s valuation to more than $600 million and positioned the company to double the share of low-emission vehicles in its fleet to 80% by 2028. Similarly, South African startup Planet42 raised $15.8 million in debt and equity funding from Standard Bank to help it continue to expand. Launched as CarGet in 2017, the rent-to-buy car subscription startup uses an automated scoring algorithm to underwrite applications for underbanked consumers based on credit bureau, affordability and alternative data. Planet42 plans to use the new funding to pay off more expensive euro-denominated loans. Meanwhile, Peruvian startup Leasy, which offers auto financing via subscription model to ride-hailing drivers in Latin America, scored a $28 million investment led by Chilean VC firm Magma Partners . Leasy intends to utilize the investment to ramp up sales, streamline existing operations in Mexico and Peru, and develop new financing options that cater to a broader range of vehicles. Eyes on expansion Like Leasy, Mexican startup OCN closed an $86 million series A funding round last year, while Beepkart and Turno scored series A extensions. OCN , a gig-worker financial platform formerly known as OneCarNow , intends to use the funds for international expansion; the fintech recently launched operations in South Florida. The equity component of the round was co-led by U.S. venture capital firms Collide Capital and Great North Ventures , alongside Brazilian VC Caravela Capital . The debt funding was provided by New York-based investment company i80 Group . Both Beepkart and Turno are Indian startups in the two- or three-wheeler financing sector. Beepkart closed a $6.5 million round from existing investors, including Chiratae Ventures , Stellaris Venture Partners and Vertex Ventures . The company plans to expand operations outside its current footprint in Bengaluru and Chennai. Turno closed a $5.5 million round led by British International Investment , the U.K. government’s development finance institution, with participation from Stellaris Venture Partners, B Capital , Quona Capital and Accion Venture Lab . The startup plans to utilize the cash to scale up and fund purchases. Fintechs enter auto A trio of companies — Funding Bee , Kredete and Ayan Capital — secured seed funding last year. Both Funding Bee and Kredete plan to use their funds to enter the auto finance space. Malaysian digital microfinance firm Funding Bee intends to use its $500,000 investment to create and implement a secured vehicle finance program in Southeast Asia, while Nigerian credit-building firm Kredete aims to utilize its $2.3 million investment to expand its services to all African countries and develop auto loan, mortgage and credit card products tailored to African immigrants. Meanwhile, London-based Ayan Capital, a 1-year-old Islamic car finance company, intends to use its $3.6 million of seed funding to further expand its range of halal financial products in the U.K. More than a third of the funding — $827.3 million — went to U.S.-based companies, including DigniFi ($175 million), Yendo ($165 million), Aven ($142 million) and Solutions by Text ($110 million). Indian companies combined to score $365.1 million of investment capital, while U.K.-based fintechs secured $284.6 million in funding. Other top investment recipients were SK Finance ($160 million), MNT-Halan ($157.5 million), Carmoola ($122.6 million) and Moove ($100 million). Looking ahead How will auto fintech funding shake out this year? So far, January has seen only a single $3 million seed investment for a company that provides software and tools to help dealerships sell electric vehicles. By comparison, more than $500 million in investments were made in January 2024. Funding will surely pick up as the year progresses, and fintechs focused on artificial intelligence and underbanked consumers will likely be popular among venture capitalists. My best guess for fintech funding this year: $2.9 billion. Auto Finance Summit East 2025 is set for May 12-14 at the JW Marriott Nashville featuring fireside chats with Santander Consumer USA and Chase Auto. Visit autofinance.live for more information. Click here to register for the event.

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Auto fintech investment surges 70% in 2024

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