DigniFi, which helps people finance automotive repairs and services, has brought in a $14 million Series A to help people for whom not repairing their car is not an option.
The Seattle-based company provides a fintech marketplace that connects consumers with lenders to help finance large repair costs, CEO Richard Counihan told Crunchbase News. Customers are acquired at the point of sale at dealerships and repair shops, and if approved, are given loans to be paid back in one to three years.
BuildGroup and Exor Seeds led DigniFi’s Series A round. Counihan said the company raised a seed round back when it was launched in 2013, but did not disclose the amount nor confirm the total funding raised to date.
Counihan said auto financing is a $450 billion market, which includes repairs, time, materials and financial products such as extended warranties. A 2017 AAA study found that 64 million American drivers would not be able to pay for an unexpected vehicle repair without going into debt because the average car repair costs between $500 and $600. DigniFi finds that its average ticket is three times that cost because people often defer maintenance due to the cost, Counihan said.
“The cost of repairs is increasing, so we help people in their time of need,” he added. “The dealer is paid upfront, so they are happy, the person is happy because they are getting their car repaired and can safely drive.”
DigniFi plans to deploy the funding to automate loan applications, invest in machine-learning automation and increase its network, which already includes 5,000 auto service centers. The company has 75 employees right now, with about 25 of them in sales, which Counihan said will double in the next six to 12 months.
The company also wants to help Americans get back on the road after COVID-19, including the repair shops themselves, he added.
“We see a huge market opportunity because we have barely scratched the surface of the auto retail network,” Counihan said. “Most American households visit a repair shop three times a year, so there are lots of contact points where we can acquire new customers. We are also looking at new business areas where customers have a ‘need’ instead of a ‘want.’”
In addition to the fund raise, the company said it signed a partnership agreement with investment manager Neuberger Berman to provide $275 million of purchasing power to DigniFi’s platform.