VW Credit Inc. plans to make an equity investment in AutoGravity Corp., which has developed a car shopping and financing mobile app and Web platform, the captive finance company said Thursday.
The investment, which is pending regulatory approval, aligns with VW Credit's goal to create a digital experience for its customers, the company said in a statement.
The investment amounts to $30 million, said a person familiar with the deal.
With AutoGravity, customers can shop for a car, select a nearby dealership that has the vehicle, choose from up to four finance or lease offers and get preapproved. The dealership still receives a fee, known as dealer reserve, on the financing and customers finalize the transaction at the dealership, where they can buy finance and insurance products and take delivery of the vehicle.
VW Credit has also worked with the company on an AutoGravity-powered, VW Credit-branded mobile app and Web platform for Volkswagen and Audi customers in the U.S. Vehicle financing options now are also available on the AutoGravity platform, the statement said.
"Customers are becoming more demanding of mobile technology and the world of auto financing is no exception," VW Credit CEO Horst Meima said in the statement. "We are ready to become a leader in shaping this part of the industry and believe that AutoGravity can help get us there."
AutoGravity has partnered with more than 20 auto lenders, including Mercedes-Benz Financial Services, First Investors Financial Services and Westlake Financial Services. AutoGravity launched a pilot of its app and Web platform in California about a year ago. Since then, the app has become available in 49 states and has reached nearly 500,000 downloads.
In February, Daimler announced an investment in the double-digit millions of euros in AutoGravity, of Irvine, Calif.
AutoGravity CEO Andy Hinrichs has held executive positions at Daimler Financial Services Africa, Asia-Pacific, Daimler Financial Services Americas and Mercedes-Benz Financial Services USA.
"Mobile technology is a game changer for consumers, dealers and lenders. We have pioneered a digital experience that saves time and improves satisfaction for all parties through a device we are intimately familiar with -- the smartphone," Hinrichs said in the statement. "AutoGravity has experienced substantial growth since our first app hit the marketplace in the summer of 2016. This investment will help us accelerate in the face of rapidly growing consumer and industry demand."
VW Credit, of Herndon, Va., was founded in 1981 to function as the captive financial services arm of Volkswagen Group of America, Inc.