Investors pumped $1.9 billion of capital into auto fintechs through June as the average transaction size inflated, according to an Auto Finance News analysis of public deals. Auto Finance News is a sister publication to Bank Automation News.

Total investment was up 41% year over year, while the average capital infusion nearly doubled to $121 million from $65.6 million, according to AFN data. In all, 16 fintechs scored investments, compared with 21 through midyear 2024.

Major players

Plaid, which connects bank accounts to financial applications, scored a $575 million capital injection from an April sale of common stock. New backer Franklin Templeton led the investment, with participation from BlackRock, Fidelity Management and Research, NEA and Ribbit Capital. Most of the proceeds will be used to cover tax obligations related to employees’ stock. Plaid has expanded its offerings recently to include lending, identity verification, credit reporting and payments. Carvana, for one, has integrated Plaid’s RFP technology to enable customers to connect with their banks to submit payments instantly.

U.K.-based Carmoola bagged the second-largest funding deal this year, a $405 million debt facility provided by NatWest and Chenavari Investment Managers. The three-year, private, asset-backed securities facility, which triples Carmoola’s previous debt capacity, will be used to support the direct-to-consumer lender’s plan to drive operational efficiency and expand to broader market segments. Carmoola’s mobile app enables car buyers to apply for loans, customize payment schedules and complete vehicle purchases online or directly at dealerships via a virtual card that can be added to digital wallets like Google Pay and Apple Pay.

Meanwhile, neobank Zolve raised $251 million in equity and debt financing that will be used to help the company scale its business and enter new geographies. The series B funding round, which valued the company at $800 million, was led by Indian private equity firm Creaegis, with participation from Accel, HSBC, Lightspeed Venture Partners, SBI Investment and Sparta Group. Houston-based Zolve provides banking solutions to a borrower segment typically deemed high-risk: consumers moving to the U.S. from abroad. Zolve, which has 750,000 customers and has processed $1.2 billion in transactions, plans to use its newfound funds to expand into Canada, the United Kingdom and Australia, and to incorporate auto, personal and education loans into its product portfolio.

Rise of AI

A pair of AI-powered auto inspection companies nabbed funding in the first half. Israeli firm UVeye scored $191 million in a series D round, and U.S. firm Self Inspection secured $3 million in a seed round. UVeye’s financing consisted of $41 million in equity financing, with participation from UMC Capital and MyBerg, and a $150 million debt facility structured by Trinity Capital.

UVeye, which scans nearly a million cars per month, plans to use its new funds to deploy hundreds more inspection systems this year. The systems use cameras to scan a vehicle’s undercarriage, exterior and interior and have been popular with CarMax, which invested in the company in 2023, car dealers and manufacturers. Meanwhile, Self Inspection counts Westlake Financial among its customers, delivering condition reports to dealers during trade-ins, remarketing procedures and repossession processes.

Four AI insurtechs also scored funding:  

• High Definition Vehicle Insurance ($40 million);  

• Marshmallow ($90 million);  

• Ominimo ($11 million); and  

• Crabi ($13.6 million). 

Global startups

Spinny, an Indian used-car platform, had two capital infusions in its Series F round — a $131 million injection in March led by Accel Leaders Fund and a $30.6 million investment in June led by WestBridge Capital, which now holds a 2.74% stake in the company.  

Mexican startup Kavak scored $127 million in its latest funding round led by SoftBank Group Corp. and General Atlantic. Kavak intends to use the capital to strengthen its auto lending business, which is now financing about 60% of purchases on the platform through Kuna Capital, its financing arm.

Other companies receiving funding include:  

• Togo-based ride-hailing and vehicle financing service Gozem raised $30 million in a series B round; 

• Japan-based microfinance provider Hakki Africa raised $12.7 million in a series C round; and 

• Egypt-based e-commerce marketplace Sylndr raised $15.7 million in a series A round.

EV fintechs

EV-related firms Lyteflo and Plug have received seed funding in recent months. Lyteflo intends to use the $3 million received from Diagram, Whitecap Venture Partners and Amplify Capital to integrate additional tools into its EV merchandising solution that helps dealers sell EV inventories

Online EV auction company Plug aims to use its newly acquired $6.7 million to improve its EV pricing system. Plug has facilitated more than $15 million in wholesale EV sales since early 2024 and serves more than 400 franchised dealers, independent dealers and commercial consignors.

Editor’s note: This article first appeared on Auto Finance News, a sister publication to Bank Automation News.