Kansas City-based startup BacklotCars will sell for $425 million to KAR Global, an Indiana-based company that holds auctions for used cars, the companies announced Tuesday. The deal still requires regulatory approval.
Founded in 2015, BacklotCars runs an online marketplace that lets car dealers remotely browse and purchase vehicles wholesale.
“BacklotCars has grown rapidly in the highly competitive dealer-to-dealer space and is the perfect complement to our current capabilities and footprint,” Jim Hallett, chairman and CEO of KAR, said in a release.
BacklotCars currently works with dealers in 46 states. The startup recently integrated artificial intelligence and machine learning into its platform in order to match customers with vehicles that fit their desired specifications.
The company employs 187 people and has raised $50 million in outside investment to date, according to Startland News.
BacklotCars’ co-founders — Justin Davis, Ryan Davis, Josh Parsons and Fabricio Solanes — will remain with the company following the acquisition, according to the release. KAR plans to continue operations at BacklotCars’ headquarters in Kansas City.
“We’re excited to expose Backlot sellers’ inventory to KAR’s active buyer base while expanding buyer access to quality wholesale inventory beyond their respective local markets,” Justin Davis, BacklotCars’ CEO, said in the release.
With this acquisition, KAR hopes to expand its digital presence and services, as well as strengthen its position among dealer-to-dealer digital marketplace providers. KAR currently operates in 80 countries and, in 2019, sold roughly 3.8 billion units at auction, with a revenue of about $40 billion.