The BC startup wants to capture a slice of the hot used car market.
Fresh off of its recent New Ventures BC (NVBC) startup competition win, Vancouver-based MintList raised $2.76 million CAD in seed financing to support the launch of its online auto sales platform.
For MintList, (incorporated as TrafficDriven Technologies), the funding announcement follows the recent public launch of the company’s platform in Vancouver.
MintList allows consumers and car dealerships to buy and sell used vehicles from one another. The company is part of a growing list of Canadian tech firms looking to capture a slice of the online used car sales sector, which has seen increased consumer demand and rising investor interest amid pandemic-fuelled vehicle shortages.
The startup’s all-equity seed funding round, which closed in late October, was led by Toronto-based StandUp Ventures. It was also supported by Vancouver-based wealth management firm Nicola Wealth, which previously invested in MintList, Vancouver’s WUTIF Capital, and undisclosed members of Creative Destruction Lab (CDL). The seed funding brings MintList’s total venture financing to date to $3.2 million.
MintList was founded in 2020 by auto sales industry veteran Mike Wood (CEO) and Mehrsa Raeiszadeh (COO). It offers an artificial intelligence-powered platform for buying, selling, and trading cars. MintList connects consumers selling and buying used vehicles to dealerships.
“New car supply has been severely constrained because of the chip shortage, and that’s put upwards pressure on used car pricing because there are no new cars,” Wood told BetaKit. “People still have a need for a car … and now if they can’t get a new car, they’re buying used.”
Michelle McBane, StandUp’s managing director, told BetaKit that the MintList team “was very compelling,” highlighting Wood’s knowledge of the auto sales industry and Raeiszadeh’s “scrappy startup experience.”
Wood brings over 30 years of experience in automotive leasing and sales to MintList, while Raeiszadeh previously spent time working for startups like Microdermics and Novateur Ventures.
Canada’s online auto retail sector features a mix of established players like TSX-listed EBlock and well-funded startups like Canada Drives and Clutch. Canada Drives and Clutch gave both recently raised major funding rounds amid rising investor interest fuelled by COVID-related vehicle shortages.
McBane attributes this investor interest to the market demand for used cars and the shortages, adding that this is “not a market that has been touched until recently.”
“It took COVID, quite frankly, to push the mindset of dealers towards doing this and consumers to say, why are we still buying and selling cars this way?” said Wood. “Why can’t I just do this from home?”
According to McBane, MintList is different from other used car sales platforms out there because it doesn’t take on any inventory risk. It simply provides a means for dealers and consumers to buy and sell from one another.
“Canada Drives, Clutch, they’re replicating Carvana’s model in the south,” Raeiszadeh told BetaKit. “They’re building an online dealership, they’re building an online inventory. They need that $100 million to build inventory.”
Rather than cut the dealer out of the equation, MintList permits more dealers to buy from and sell to consumers digitally. “The whole idea is that you don’t need to recreate the wheel here,” said Raeiszadeh.
Toronto-based EBlock and TradeRev take a similar approach, but only allow dealers to sell to other dealers through their online auction platforms.
According to MintList, the opportunity for the buying and selling of used cars is estimated to be more than $40 billion in Canada alone.
MintList’s seed financing follows its recent NVBC victory where the company took home the first prize, snagging $110,000. For Raeiszadeh, the win represents the second time she has taken home the award.
Around that time, MintList began beta testing its platform in British Columbia in October 2021, before launching it to the public in the Vancouver area, including Vancouver Island. Since then, the platform has hosted live weekly auctions and sold more than $2 million in inventory.
To date, MintList has invested this funding in hiring, product development, the beta-testing of its live auction platform, and marketing efforts in BC’s lower mainland.
Over the past year, the startup has grown its team of three to over 20. MintList also claims it has also established “strategic partnerships” with one of Canada’s largest insurance companies, one of BC’s largest auto insurance brokers, and a global service provider to 6,000 dealerships in its target markets of Canada, the United States, and the United Kingdom.
MintList’s platform currently allows consumers to sell to dealers. The startup plans to launch the full suite of services on its platform “in the coming months.” This will include the ability for consumers to buy from dealers and trade-in cars.
MintList also plans to expand across Canada throughout 2022. The company has already signed dozens of dealers to its platform in two undisclosed provinces outside of BC.