Also involved were Mack McLarty, a longtime dealer and vice chairman of RML Automotive, which is No. 31 on the Automotive News list; his son, Franklin McLarty, CEO of McLarty Diversified Holdings; and Texas dealer Ken Schnitzer, chairman of retailer Avondale Group and former chairman of Park Place Automotive Group, a large luxury-brand retailer acquired by Asbury Automotive Group Inc. in 2020. The amounts invested by the individual parties were not disclosed.
Rodo does not maintain its own fleets or vehicle inventory. Instead, it partners with more than 1,200 dealerships in the U.S. — highly concentrated in the New York and California markets — to offer vehicles. It bills itself as offering an end-to-end solution for purchasing a car within minutes via its app or website.
The new chunk of money brings Rodo to $45 million in total funding. The $18 million will be split between scaling the company's dealership network and customer acquisition, which will take about 70 percent of it.
"For the rest of this year, we plan to keep the dealer network around the same size as it is now ... and we're going to focus on enhancing the relationship with those dealers and further promoting Rodo in those regions," Rodo founder and CEO Nathan Hecht told Automotive News. "That's our near-term strategy."
Rodo is likely to start expanding the dealership network in 2022, Hecht said. At the moment, its key markets are the New York tri-state area and metro Philadelphia, Los Angeles, Chicago, Boston and Miami.
"We'll add incrementally around 100 dealers a quarter, maybe 150 [dealerships] per quarter, by the end of 2022," Hecht said. "If we end '22 with about 1,800 dealers, maybe closer to 2,000, that would be a good number for us."
Rodo, previously known as Honcker, launched in 2016. The startup says it offers for sale on its platform more than 80,000 vehicles from 25 manufacturers.
The company experienced a major surge in volume and revenue in 2020, according to a press release. Rodo expects revenue to expand more than six-fold in 2021, Hecht said, and it projects the value of vehicles involved in transactions via Rodo to be in excess of $1 billion this year.
Bill Cariss, CEO of Holman Strategic Ventures, another Holman Enterprises unit, will join Rodo's board, according to the release.
Robert Roman, president of HartBeat Ventures, said in a statement: "Our team is passionate about cars and want to support platforms with transparency and an easy-to-use format that gives power back to the consumer."
Auto investment banking firm Presidio Group advised Rodo on the financing.