Taking customer experience to new heights and our investment in Tekion
The couple, eager to buy a new car, take their seats in the office of the car dealer. Being used to a simplified digital purchasing experience à la Apple store or Amazon, the couple would be surprised to see, on the other side of the desk, their dealer may have 10 or more different log-ons and windows open on the computer, including some reminiscent of a black DOS screen with block letters and blinking cursor. Our research found car dealers typically rely on on-prem software packages some might call archaic. As many of these solutions can’t address the comprehensive needs solely, separate point solutions have proliferated in order to fill in the gaps in function. However, this happened at the cost of increasing complexity and fragmentation (think about those 10+ windows, separate logins and data flow in between).
Auto dealers represent a large market made up of franchised and independent dealers. According to data from the National Automobile Dealers Association, the US market is robust but extremely fragmented, with the top ten dealer groups owning only ~8% of all ~17K franchise dealerships in the US. The average dealer sells only ~1K new cars per year of the ~17 million sold in total. There are an additional >18,000 independent dealerships that are typically single roof, family owned shops. A well-known market research company estimates the global software market for auto dealers to reach $18B by 2022.
Car dealers have played a key role historically, as they represent automakers, provide customer service functions and their performance impacts customer satisfaction directly. Yet, given the highly fragmented and on-prem software environment, the integration of all of these systems with OEMs has become a challenge. Additionally, the importance of dealers is even more emphasized today, since they are also the place for direct feedback, and feedback is more important now than ever, as cars are becoming data centers on wheels and software (read: iterations based on feedback) plays a key role.
Our investment in Tekion
Tekion has built the first and fastest cloud-native automotive retail platform connecting and aligning all three key stakeholders in the automotive ecosystem: OEMs, dealers, and consumers, seamlessly. This helps deliver outstanding customer experience and achieve profitability through one incredibly fast, easy-to-use automotive retail platform.
Tekion was founded by an impressive team combining deep enterprise cloud platform understanding with automotive and dealer operations. Founder & CEO Jay Vijayan was the CIO of Tesla, for over 4 years from 2012 to 2016, where he and his team built Tesla’s end-to-end Digital and Information Systems (including ERP & DMS) from the ground up. Prior to Tesla, he held senior management/ engineering roles at VMWare and Oracle. What is even more impressive is the value Tekion has been able to deliver to its customers in a short period. On top of seamless and world-class customer experience, some customers have already reported a 50%+ boost in CSI (Customer Satisfaction Index) and a 100%+ increase in revenues year over year!
As previously shared, we’ve co-led Tekion’s Series B round with Alliance Ventures, and joined the existing investors, Index, Storm, AME Cloud and Airbus Ventures. Most recently, General Motors joined us as an investor. We have no doubt that Jay and the world-class Tekion team will play a big part in the evolution of the automotive retail and we are thrilled to join this journey!
Baris is an engineer with work experiences in venture capital and top-tier investment banking. At BMW i Ventures, Baris has been closely involved with the investments in Tekion, Zūm, Mapillary, Xometry, Vera, Strivr, Chargepoint and Life360. Baris holds a Master of Engineering and Technology Management from Duke along with an MBA (Dean’s Fellow & Full Tuition Waiver) from UNC Kenan-Flagler Business School, where he led VCIC, the world’s largest venture capital competition. Please feel free to reach out on firstname.lastname@example.org, @BarisGSF over Twitter or on https://medium.com/@BarisGSF. For more details on BMW i Ventures, please visit www.bmwiventures.com.
Note: This story is a repost from the BMW i Ventures blog