Shift, the online used car reseller that takes the crappy dealership out of the sales experience, has raised $38 million in its latest round of funding.
The company, which is wildly popular among millennials that still buy cars, managed to raise the money from investors led by BMW i Ventures, which has been on an investment tear recently.
Other new investors in the round included DCM Ventures and G2VP, as well as continued participation from DFJ, Highland Capital and Goldman Sachs Investment Partners.
As a result of the investment, Christian Noske, a partner with i Ventures, has taken a seat on the Shift board of directors, with Jason Kirkorian of DCM and Brook Porter of G2VP joining as board observers.
“Our fund one was focused on customer experiences and creating an excitement for consumers,” said Noske of the decision to invest in Shift. “We believe car buying and car selling is still a very high-touch business… you want to see it, you want to sit in it.”
And the success of Shift belies many stories that younger generations of car buyers are more interested in the sharing economy than in owning vehicles.
“The notion of ownership and usage is based on availability on those [carsharing] services. Those services are not readily available everywhere in the U.S.,” Noske tells me. “A huge part of the population lives outside of that where you might have a child or a family and then owning a car is very important.”
Only 20 percent of jobs in the U.S. are reachable by mass transit in less than 90 minutes, says Noske, which means, for much of the United States, cars are still a necessity.
“What the dealerships haven’t been able to do is figure out how to sell cars to young people,” says George Arison, the chief executive of Shift.
While Shift falls into the wheelhouse of the i Venture group’s initial mandate, the investment arm that’s affiliated with BMW has expanded the scope of its investments well beyond the dealership and the customer experience.
The company said it will use the money to expand geographically.
“BMW is, without a doubt, one of the most iconic car brands in the world, which truly makes this a pinch-me moment for the entire Shift team,” said Arison in a statement. “We are also honored to have DCM and G2VP join us with such significant participation in this round.”
With the investment the company has raised more than $110 million.