A shortage of available vehicles, higher car prices and interest rates are fueling car owners to hold onto their vehicles longer. Statistics from the Bureau of Transportation Statistics show that the average passenger car on the road is over 13 years old. In 2017, the age of the average car was 11 years old.
All of that holding on means more repairs, but 90% of auto repair shops still use “archaic technology” in the form of spreadsheets and clunky invoicing tools. Though these may be increasingly difficult to use, “change to something new” is keeping shops from upgrading, according to AutoLeap co-CEOs Steve Lau and Rameez Ansari.
Focused on ease of use, AutoLeap is providing an enterprise SaaS offering for the auto repair industry that digitizes their workflow, including the processing of customer quoting, invoices and job estimates. It also has a sales and marketing component for customer relationship management.
The company touts that in the first year of using its software, auto repair shops, on average, realize a 30% increase in revenue and a 50% decrease in time spent on administrative tasks.
Meanwhile, auto repair technology is shifting from “a nice to have” to a “must have,” especially as older shop owners turn their companies over to younger, more tech savvy successors, Steve Lau told TechCrunch.
“Given the economic climate, we’re entering into the golden age for aftermarket auto repair where a lot of these trends are a huge net positive for our customers,” Steve Lau told TechCrunch. “The older the car gets, the more expensive that repair gets. You also have this interesting dynamic and trend where the preference for ‘do it for me’ is now overtaking do it yourself. Ultimately, we’ve seen tremendous growth from our customer base over the past year.”
An industry ripe for technology also means more startups are coming in with approaches to solving the problem and in turn attracting investor attention. CarmaCare, touting its “healthcare-for-your-car” angle, announced $4.5 million in funding earlier this month, while over in Brazil, Mecanizou raised $14.5 million to help repair shops locate parts.
AutoLeap itself closed on $30 million in Series B in March. The round was led by AVP (Advance Venture Partners) with participation from existing investors Bain Capital Ventures and Threshold Ventures. As part of the investment, David ibnAle from AVP is joining AutoLeap’s board.
The company raised $53 million in total, and since its $18 million Series A in late 2021, AutoLeap grew its customer base by nearly 10 times. Lau declined to go into detail about revenue growth, but did say “it’s been very strong revenue growth commensurate with our customer growth.”
AutoLeap’s team has more than doubled in the past year, and the new capital will go toward the continuation of hiring across all functions. In addition, the company will invest in product development and customer experience.
Raising a Series B often signifies the exiting of “startup” status, and as part of AutoLeap’s continued growth, the company now plans for more thought leadership around the shift in technology among auto repair shops, Rameez Ansari said in an interview. For example, AutoLeap recently held its first virtual auto repair conference in March, called Amplify, and Ansari wants to do more like that.
“We want to continue to educate the market,” Ansari said. “We’ve been doubling down on doing webinars with some of the most well-known carriers and industry coaches with the intention to educate the space on the technology transformation that’s happening.”