The combination of vehicle listings company TrueCar and Digital Motors, a digital retailing platform provider, started at this year's NADA Show.
TrueCar CEO Mike Darrow and Digital Motors founder Andy Hinrichs told me they ran into each other in Las Vegas and started conversations that ultimately led to TrueCar's acquisition this month of Digital Motors, the startup Hinrichs formed in 2018.
TrueCar has been in acquisition mode, Darrow said in May, as the company works to advance development of its TrueCar+ digital sales tool. The tool allows consumers to choose a vehicle, set up financing, add finance-and-insurance products, arrange delivery and complete a transaction all primarily within TrueCar's platform.
"We've been looking at all the digital platforms that were out there. And that market was so expensive for a while," Darrow told me last week after an Automotive Press Association event in Detroit. He cited dealership technology giant CDK Global Inc.'s $360 million purchase of digital retailing provider Roadster in 2021 as an example.
Then came Digital Motors.
"You can tell what's just conversation and when a company's serious, and they were showing they were serious," Darrow said. "They could tell we were serious. They knew we had some cash and wanted to make some investments."
Terms of the deal were not disclosed.
Digital Motors' online retailing platform went live in March 2020. Hinrichs, who said he will continue to run the business as a TrueCar senior vice president responsible for Digital Motors, told me this week that Digital Motors executives were not actively looking to sell the company, though they had been approached about opportunities.
Digital Motors' technology now will be applied on a larger scale across TrueCar's network of dealership customers, vehicle shoppers and affinity partners that run car-buying programs, said Hinrichs, a former Automotive News All-Star who also founded financial technology company AutoGravity and held leadership roles with Daimler Financial Services and Mercedes-Benz Financial Services USA.
At the same time, he said, Digital Motors' technology and team will help accelerate TrueCar's transactional capabilities.
"In this case," Hinrichs said, "it made a ton of sense."