From Series A to Public Company: Shift Takes the Road Less Traveled
by Emily Melton, Threshold Partner
Congratulations to Shift for building a successful online platform dedicated to providing a better used car buying and selling experience.
In 2014, Threshold invested in Shift Technologies’s Series A round under the core thesis that traditional brick and mortar auto retailers would eventually be disrupted by digital-first dealers driven largely by consumer demand. At the time, investors were skeptical that customers would purchase used vehicles online, but today that assertion is no longer controversial. Today, Shift continues the journey to creating an iconic consumer company by going public (NASDAQ: SFT) via a reverse merger with a special-purpose acquisition company (SPAC).
Shift provides an online marketplace for customers to buy and sell used vehicles. While COVID-19 caused traditional brick and mortar dealerships around the country to shut down, Shift witnessed a surge in its online car sales. COVID has highlighted the importance of embracing digital transformation early. The company also built a best-in-class technology platform to improve operational efficiency, sales, and customer experience. Shift’s proprietary platform, combined with a unique service model, created a seamless experience for consumers to buy, sell, trade, and finance used cars. Shift embraced a digital-first experience from its founding days and continues to enhance its tech platform with pricing algorithms, customer recommendations, and loan pre-qualification. Shift’s technology-first focus has enabled the company to meet the needs of consumers who want to shop digitally and experience a safe and personalized transaction.
The US used-vehicle market was over $840 billion in 2019 and highly fragmented, with the top 100 dealer groups representing 6% of the market. While 30% of apparel, shoes, furniture, and appliances are sold online today, less than 1% of used cars are sold online, highlighting the tremendous market opportunity that Shift is primed to capture.
Shift is well-positioned at this Threshold Moment, and we are excited about the opportunity ahead. Congratulations to George, Toby, and the Shift team!