The dealership management system world is grabbing headlines.
A startup, Tekion, last week said it raised $150 million in its latest funding round. That brings the company's valuation to more than $1 billion, said Tekion CEO Jay Vijayan, a former chief information officer at Tesla. The company plans to use the money to add features to its cloud-native DMS and bring more dealerships on board.
Tekion has not disclosed the number of dealerships already enrolled on its DMS, but Vijayan said Tekion customers' stores span 28 states. The company is looking to grab a larger piece of the competitive DMS market, which is dominated in the U.S. by two players — publicly traded CDK Global Inc. and privately held Reynolds and Reynolds Co.
Reynolds also is making the news. CEO Bob Brockman this month was indicted on federal charges of tax evasion, wire fraud and money laundering after prosecutors alleged that he hid $2 billion in income to avoid paying taxes.
The Dayton, Ohio, company is not accused of wrongdoing in the government's case. Yet the allegations against Brockman, who remains the company's chairman and CEO, have raised questions about what might be ahead for Reynolds and Reynolds — from its leadership and potential ownership to how customers and competitors may respond.
Dealers have described switching DMS providers as akin to a heart transplant. It's not a transition they make lightly. The industry will be closely watching these two providers — and the DMS market as a whole.