Shift Technologies' appraisal algorithms and consumer-controlled online platform helped it quickly become one of the largest used-car retailers around Silicon Valley. So Lithia Motors Inc. CEO Bryan DeBoer posed this question in a meeting with Shift's senior leadership: Why haven't you scaled up that model at a faster pace?
"They said they didn't have the capacity of storage, reconditioning facilities and access to capital," DeBoer told Automotive News. "Three items Lithia has easy access to."
The Medford, Ore., dealership group has committed $54 million as part of a strategic partnership between the companies that will provide the capital Shift needs to expand beyond California and across the country. Lithia, which ranks No. 4 on the Automotive News list of the top 150 dealership groups based in the U.S., will become Shift's largest shareholder and get a seat on the company's board of directors.
The partnership aims to leverage Lithia's physical infrastructure to supplement Shift's existing storage facilities.
"We'll continue to expand Shift's footprint," Shift Co-CEO Toby Russell said. "We'll expand into Lithia's footprint and into a brand new space where neither Lithia nor Shift exist."