Goeasy plans to leverage its acquisition of LendCare with online car sales start-up Canada Drives

A financial services company makes a $40 million equity investment and joins the board of directors of Canada Drives.

Financial services company goeasy is making a $40 million minority investment in online car and delivery startup Canada Drives.

Goeasy intends to leverage its 2021 acquisition of fintech start-up LendCare as the preferred non-bank finance provider on Canada Drive’s online automotive retail platform.

The investment is being made in four installments and is structured as a convertible note that will convert into preferred stock. Goeasy will also become an observer on the Canada Drive Board of Directors.

The strategic partnership will allow goeasy to provide auto financing to non-preferred borrowers who purchase and finance a vehicle using the Canada Drives platform. According to goeasy, the partnership will allow the financial services company to accelerate its plan to become the leading non-bank lender in Canada’s $58 billion non-preferred auto finance market.

Canada Drives currently operates in British Columbia, Alberta, Saskatchewan and Ontario. The startup plans to use the new funds to expand into new provincial markets, increase its inventory and improve its digital platform.

The startup said it intends to double the number of certified pre-owned vehicles available in existing markets and the team to support its ambitious growth plans. Currently, Canada Drives has over 700 employees.

Jason Mullins, president and CEO of goeasy, calls the expansion of the company’s auto finance program a key strategic growth initiative. He said Canada Drives has built an impressive vehicle retail platform while “growing the business to a significant level in a short period of time.”

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Founded in 2010, Canada Drives claims to have seen significant growth in sales, with a 580% increase over the past year.

Canada Drives isn’t alone in the bustling online automotive marketplace. Clutch secured $150 million in debt financing from funds managed by private investment management firm Neuberger Berman in May to boost its national expansion and inventory of used vehicles. E Automotive (E Inc.) went public in 2021, grossing C$135.7 million.

AutoZen raised an additional $5.1 million in June, following seed funding of $4.2 million in 2021.

Canada Drives isn’t goeasy’s only strategic partnership. The company partnered with FinTech startup Mogo in 2020 for alternative funding. He announced the partnership five months after the two companies announced they would set up a pilot program for a personal loan offering.

“As goeasy has proven to be a leader in the consumer loan market, they are an ideal business partner with a shared vision for a seamless car buying experience,” said Cody Green, Founder and Co. – CEO of Canada Drives. “We also welcome goeasy as a strategic investor in our business and look forward to working with them as a long-term partner.”