January 13, 2019 — Two somewhat obscure press releases last week hint at what may be the next “disruption” in the auto retail industry. Disruption is an easy term to throw around, but in automotive retail, three areas are ripe for significant innovation — CRM, service, and dealer management systems. The Banks Report isn’t in the business of hyping solutions or press releases, but the two announcements last week caught our attention.
The company highlighted in the two press releases is the Tekion Corp., a startup founded by Jay Vijayan in 2016 following a four-year stint as Tesla’s chief information officer. Vijayan, armed with a $3.5 million seed investment from Storm Ventures and BluePointe Ventures, has operated in stealth mode since March 2016. Tekion secured a $35 million Series B round in January 2018. Investors included Index Ventures, Alliance Ventures, Storm Ventures, AME Ventures, Exor, and Airbus Ventures.
In one of the two press releases last Thursday, BMW i Ventures announced it had also invested in Tekion, although no terms were disclosed. But it’s likely its investment brings Tekion’s total raise to the $50 million neighborhood since 2016.
In the initial press release Thursday, Tekion came out of stealth mode and announced the launch of its digital Service Experience (dSE) platform. (Read the Tekion Press Release).
Admittedly, the announcement isn’t exciting. Tekion claims its platform connects the entire service experience from online scheduling to payment “and everything in-between.” Online scheduling has been around for more than 15 years when xTime (now owned by Cox Automotive) and Timehighway (owned by Affinitiv) pioneered the concept.
The platform will leverage Amazon-like artificial intelligence to recommend the best service times, potential upsell opportunities for the dealer that are personalized to the customer. For the customer, the platform will provide simple scheduling, fast check-ins, real-time updates, and online payment options via a personalized interface.
The service-focused platform, with voice and mobile technology, likely will be a step-up from current industry solutions. And innovation in the service and repair industry should be the next frontier. It’s happened on the sales side with e-commerce (digital retailing) and finance the last several years.
But Tekion hasn’t raised nearly $50 million (or more) from reputable venture capital firms to only build a nicer service platform tool.
There’s a bigger play and our guess is that it will be either in the CRM space or in the dealer management system (DMS) arena — either later this year or sometime in 2020. Vijayan has put together a company armed with money and about 150 employees — many of which are developers in India.
We’ll get our first look at the dSE platform next week during the National Automobile Dealers Assn. convention. Tekion currently is setting up demos at the San Francisco office of Index Ventures, one of its investors, during the convention. That will show whether Tekion is for real.
Meanwhile, this company is near the top of our watch list.
UPDATE: January 21 — Alliance Ventures, the strategic venture capital arm of Renault-Nissan-Mitsubishi, announced today it has invested in Tekion. Terms were not disclosed.