Shift bought Fair's dealer marketplace for $15M plus stock to become 'Amazon of used cars'

An online used-car platform that buys, reconditions and sells cars and now adds third-party dealer listings through Fair's technology

A used-car site that lists third-party dealer inventory beside its own cars can win by offering a seamless end-to-end digital purchase

$15M cash plus Class A stock equal to 2.5% of Shift, about $44.8M at the time, funded by a $20M SoftBank loan due by 2025

Fair had spent 18 months building what amounts to a fintech platform for shopping cars from many sources, after unsuccessful attempts at leasing and subscriptions. Its stated problem was that a $25 monthly premium for those options did not cover costs, so it scaled unprofitably.

Shift agreed to buy Fair's dealer marketplace technology and team, with closing expected in Q2 2022. Fair's legacy fleet and consumer accounts business was sold separately to a financial buyer, with proceeds going to pay down debt held by SoftBank since December 2020. SoftBank had put $385M into Fair's Series B and $500M debt in 2019. Fair CEO Brad Stewart did not plan to join Shift.

Fair burned through $2.1B because leasing and subscription options could not cover their operating costs

Shift wanted a digital transaction platform and dealer relationships without paying much cash

TechCrunch expected the used-car market to consolidate around companies with the best digital experience

Shift paid almost nothing upfront for the technology; SoftBank's loan covered the price as it tried to recover a sliver of Fair losses.

As of March 18, 2022 the transaction was expected to close in Q2; Fair was selling its remaining assets to pay down SoftBank debt, and its CEO had not committed to join Shift.