The business, which draws from a list of finance companies to give car customers the ability to compare and apply for car-loan rates from about 30 lenders, has reported it has helped about 30,000 customers since launching at the start of 2020.
Driva co-founder and co-CEO Scott Montarello told GoAutoNews Premium the capital raising would be used to develop customer-focused products including pre-qualification for customers. It would also go to increase its exposure to dealerships.
Mr Montarello also said he believed dealers would increasingly use businesses such as Driva.
“The point of sale exemption is planned to be removed and, although there is no timeline, it will bring an increasing need for businesses to have access to large capital lenders,” he said.
“So we think that dealers will continue to ask for solutions like ours and we are making ourselves as front and central as possible.”
He said that customers were showing a clear preference for the new breed of lenders over the big banks.
“When the choice sits squarely with the customer and options are easy to compare, the lender offering the best outcome will naturally win out,” he said.
Driva works with a diverse range of dealers, mainly in used cars, which they use as a second-string option if they have a link to a main finance provider.
“So we provide an alternative,” he said.
“For dealers who don’t have a relationship with a finance company, and if they don’t have an in-house business manager or finance specialist, we work with them to help their customers.”
Mr Montarello said while Driva worked closely with dealers, it did not have a partnership with an OEM “at the moment”.
“The current lending environment is very competitive and very much rate driven,” he said.
“On our platform, we notice that a lender will drop a rate and immediately the rivals will follow.
“This creates a lot of transparency for the industry and more competition which can only be good for the customer and dealerships.”
Mr Montarello also said the restrictions placed on lenders and the issue of flex commissions that tightened lending rules over the past two years had been favourable to Driva.
“We operate in a way that is genuinely unbiased from a customer perspective,” he said.
“We’re not pushing one lender over another because we may get paid more with one, so that means customers are a bit more confident to lock in a deal straight away.
“For the dealer, because they don’t have that incentive to look at a commission, they’re open to using a platform that offers a better experience and leads to higher finance penetration.”
Driva was co-founded by Mr Montarello – who was previously a consultant with McKinsey – and William Brown, a former analyst with Goldman Sachs.
Mr Brown said: “We’ve seen increased regulatory scrutiny and frequently shifting lender policies make it particularly difficult for businesses looking to provide car finance to meet compliance requirements or provide a good customer experience.
“In response to this, Driva has made available its pricing technology to a number of partners,” he said.
“This empowers them to earn finance revenue and provide the customer experience Australian consumers are demanding with one simple integration.”
Investors in Driva following the placement now include Carthona Capital; Stephen Dash, the founder of US consumer loan business Credible; and SparesBox co-founder and co-CEO of Zeder Corporation, Nicolas Scudamore-Smith. They join existing investors Peter and Daniel Gammell.
By Neil Dowling