TrueCar buys retail software company for $27 million
Vehicle-shopping site TrueCar has acquired DealerScience, a provider of digital-retailing software, for $27 million, the companies said Friday. DealerSciences founder will also join TrueCars executive team effective immediately.
DealerScience, a company that provides dealership tools including desking solutions and website plug-ins, will work on product development, sales and customer training for the car-shopping site, according to ajoint statement. Goals of the partnership include expediting vehicle desking — the thorough analysis of financing options — calculating accurate monthly payments and streamlining the consumer experience.
Customers expect to accomplish more of their car deals online, TrueCar CEO Chip Perry said in the statement, and working with tools such as those by DealerScience will position dealers to grow profitably.
"This acquisition brings TrueCar closer towards our end-to-end vision, enabling our consumers to explore lease and finance payments and provide them with more transparency about their car deal," Perry said in a statement emailed to Automotive News. "It will also allow us to offer digital retailing solutions to our dealer customers on their websites, in their showrooms and within the TrueCar marketplace."
DealerScience, which was established in 2011, will retain its name and headquarters in Boston as it operates as a subsidiary of the third-party lead generator. The companys founder, Andrew Gorden, will continue to lead his team of 28 employees while also becoming vice president of digital retailing at TrueCar, according to a company spokesperson.
Gordens team will be expanding in 2019, the spokesperson added.
In addition to the $27 million, TrueCar may make two cash payments of up to $2.5 million upon the achievement of certain revenue metrics in each of 2019 and 2020.
Both companies pride themselves on price transparency.
The publicationCar and Driverlaunched a tool using DealerSciences proprietary software last month that would allow customers to see the most detailed vehicle payment possible on a participating dealers website.
The tool, called Penny-Perfect Payments, calculates prices for shoppers, including dealer and automakers incentives, state and federal taxes, and any fees — down to the last cent.
While there are no immediate plans to integrate that tool into TrueCars products, the spokesperson said the company will explore opportunities to leverage DealerSciences competency into the TrueCar marketplace.
The promise of consumer-facing transparency has gotten TrueCar in trouble with its partners in the past. The site had a public falling out with dealership giant AutoNation over sharing customer data, which took years, and many changes to the TrueCar platform, to mend.
Since Perry took over as CEO in December 2015, TrueCar has taken steps to tweak its platform to become more dealer-friendly.
"In the past, [TrueCar] had been tilted significantly in a way that dealers found was harmful to them," Perry told Automotive Newsearlier this year. "We were able to find win-win improvements that enabled the site to continue to perform well for consumers while being much more positive for dealers."
TrueCar is headquartered in Santa Monica, Calif., with offices in San Francisco and Austin, Texas.
Vince Bond contributed to this report.