Paul Allen’s Vulcan Capital Investing $30 Million in TrueCarAlan Ohnsman
TrueCar Inc., an online auto-shopping service that may be considering an initial public offering, said Microsoft Corp. co-founder Paul Allen’s Vulcan Capital fund has invested in the company.
Vulcan Capital, which manages the personal investments of Allen, is investing $30 million in TrueCar, the Santa Monica, California-based company said today in a statement. The capital from Vulcan’s Silicon Valley-based growth equity fund will be used by closely held TrueCar to expand its no-haggle car-buying service and for product development, the company said.
“We believe TrueCar.com’s negotiation-free car buying platform has demonstrated significant traction in changing the way consumers behave in one of the largest segments of the economy,” Abhishek Agrawal, managing director at Vulcan Capital, said in the statement.
TrueCar is working with Goldman Sachs Group Inc. and JPMorgan Chase & Co. on an IPO, two people with knowledge of the matter said last month. The company, which helps consumers buy cars with pricing information from more than 6,000 dealerships, may seek a market value of as much as $1.5 billion in the share sale, one person said.
Scott Painter, TrueCar’s founder and chief executive officer, declined to comment on a possible public share offering in an interview.
“I will continue to not confirm it,” Painter said by phone today. “IPOs are about financing, and this is about financing, what we’re announcing today.”
The TrueCar.com website can now be used in all 50 states to help customers receive a guaranteed price from dealers that the company says is the lowest available.
The Vulcan Capital funds sets “us up for a really great 2014,” Painter said. He declined to provide details on how many vehicle sales TrueCar.com has handled this year or the company’s revenue.
Along with Vulcan Capital’s investment, Agrawal will become a member of TrueCar’s board, the company said.