Go, an Ardmore, Pa.-based subscription car platform, raised $6 million in a funding round led by Chicago’s Starting Line VC. The other investor was London-based Digital Horizon. So far, the company has raised $52.8 million, of which $40 million is in debt to fund car purchases.
Founded by Michael Beauchamp, Go creates an alternative to car ownership or leasing. It offers a range of nearly 50 vehicles including Tesla’s Model 3 and Model Y for a monthly subscription fee. It serves the following markets: Atlanta, Ga.; Charlotte, N.C.; Dallas-Fort Worth and Houston in Texas; Miami-Ft. Lauderdale, Tampa and Orlando in Florida; Northern New Jersey; and Philadelphia.
Beauchamp explained the company’s funding model, which is different from most other venture-funded startups. This is because Go needs to buy the cars it offers to subscribers.
“Our model was very specific in that we had to raise equity for operations and debt equity to purchase the vehicles,” Beauchamp, who previously led school improvement firm Alpha Media, told Technical.ly in an interview last year. “I’ve been telling investors lately, I’m envious of companies raising solely equity. I just got off a call with our lender, and two calls with VCs. I feel like we’re constantly raising.”
Steady Demand
Last December, Go said it had a waitlist of over 6,000 prospective subscribers as it wrestled with supply and other issues.
“We can’t get cars fast enough. Is that a problem? Sure. But there are worse problems to have,” he said. Beauchamp also pointed out that Go had achieved this level of demand with minimal marketing spend. This year, Go’s focus is on working with suppliers to dramatically increase inventory levels, he said.
Last year, Go signed a deal with Scienaptic AI, a credit decision platform, to screen prospective customers, and provide enhanced and faster decisions. The partnership with Scienaptic “allows us to further streamline our customer application and transaction process resulting in less friction and smarter screening,” Beauchamp said.
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Go’s competitors include car rental firms Hertz, Enterprise and Sixt+ that have also entered the car subscription market.
Backers
Starting Line VC, based in Chicago, has raised $47 million via four funds. It has made37 portfolio investments and exited Clyde, a product lifecycle platform that aims to assist businesses to increase profits.
London’s Digital Horizon raised $200 million via a single fund in 2018. It has made 37 portfolio investments and exited three — monday.com, Lemonade and Market Beyond.
