{"id":74116,"date":"2014-04-04T11:47:48","date_gmt":"2014-04-04T15:47:48","guid":{"rendered":"http:\/\/www.thedetroitbureau.com\/?p=74116"},"modified":"2014-04-04T11:47:48","modified_gmt":"2014-04-04T15:47:48","slug":"truecar-files-for-ipo-as-former-hyundai-ceo-krafcik-joins-board","status":"publish","type":"post","link":"https:\/\/thedetroitbureau.com\/2014\/04\/truecar-files-for-ipo-as-former-hyundai-ceo-krafcik-joins-board\/","title":{"rendered":"TrueCar Files for IPO as Former Hyundai CEO Krafcik Joins Board"},"content":{"rendered":"
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TrueCar wants cash to grow its operations.<\/figcaption><\/figure>\n

Online automotive shopping site TrueCar.com has announced plans to go public \u2013 a significant turnaround for a service that some thought might not survive a series of legal challenges that forced the company to make some major changes to its business model over the last two years.<\/p>\n

TrueCar revealed it had filed the necessary paperwork \u2013 known as a Form S-1 \u2013 with the Securities and Exchange Commission \u00a0just a day after it announced that former Hyundai Motor America CEO John Krafcik had joined the company\u2019s board of directors.<\/p>\n

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Free Subscription!<\/figcaption><\/figure>\n

Though the firm\u2019s management could not comment about the IPO due to federal guidelines, the planned stock offering is expected to raise as much as $125 million which would be used to further expand the firm\u2019s aggressive growth plans.\u00a0 TrueCar previously \u00a0raised significant funds through private equity offerings, including a $30 million investment by Vulcan Capital, the investment arm of Microsoft co-founder Paul Allen.<\/p>\n

<\/p>\n

\"\"<\/a>
Former Hyundai Motor America CEO John Krafcik will join TrueCar's board.<\/figcaption><\/figure>\n

The web service has made some significant investments in recent years, among other things purchasing ALG, the former Automotive Leasing Guide, for $83 million.\u00a0 That purchase was explained as a way to further enhance TrueCar\u2019s core strategy of providing highly accurate pricing information to potential car buyers.<\/p>\n

(March car sales thaw out after frigid winter <\/em>Click Here<\/span><\/a> for the story.)<\/em><\/strong><\/p>\n

The firm currently counts more than 7,500 U.S. new vehicle retailers as part of its network. Visitors to the TrueCar site are provided data on vehicle costs, as well as a range representing what previous shoppers had paid for that model.<\/p>\n

The website derives its revenues from both advertising and dealer fees.<\/p>\n

For the year that ended December 31, TrueCar reported a $25 million loss. But that was down from a $74.5 million deficit the prior year. And 2013 revenues rose 67%, to $134 million.<\/p>\n

Founded by Scott Painter \u2013 a web veteran who has been involved in a number of earlier online automotive shopping ventures \u2013 TrueCar has a number of key competitors, listing such web powerhouses as Autobytel.com, AutoTrader.Com and Cars.com, as well as the automotive buying venture run by warehouse giant Costco.<\/p>\n

TrueCar\u2019s model is somewhat different in that it lines up dealer partners who subscribe to the service rather than paying a fee for each potential shopper that\u2019s referred over online.<\/p>\n

(GM facing pressure to park 2.5 mil\u00a0 vehicles involved in ignition switch recall. <\/em>Click Here<\/span><\/a> for the latest news.)<\/em><\/strong><\/p>\n

But TrueCar ran into some serious challenges in 2012 when dealers and regulators around the country questioned whether its model ran afoul of strict state franchising regulations.\u00a0 Notably, states like Texas and Virginia bar so-called \u201cbird-dogging,\u201d or auto brokering, where a third party steps in to help a customer get a better price.<\/p>\n

At one point, the web service was forced to halt operations in several states. But it eventually rejigged its business strategy, in some cases making state-by-state changes.<\/p>\n

The brouhaha initially led thousands of dealers to walk away from TrueCar but it has largely recovered since then \u2013 and it is betting that its financial improvement will signal the company\u2019s potential to investors.<\/p>\n

Goldman Sachs and J.P. Morgan Securities LLC are serving as lead underwriters, according to the prospectus filed with the SEC.<\/p>\n

There\u2019s been plenty of action in the auto buying space.\u00a0 Georgia-based AutoTrader purchased Kelley Blue Book several years ago.\u00a0 In recent months, Chicago-based Cars.com has been put on the market.\u00a0 Meanwhile, Autohome Inc., a Chinese operator of various car sales websites, saw an 83% jump in its stock value after it debuted on the U.S. market in December.<\/p>\n

As for the news that Krafcik will join the TrueCar board, it’s the former Hyundai CEO’s first major public appearance since his contract with the Korean carmaker lapsed last December.<\/p>\n

\u201cVery few people are credited with elevating an emerging brand to top-\u00ad\u2010tier status within the automotive industry,\u201d said TrueCar founder Painter, in a statement. \u201cJohn Krafcik is one of those remarkable leaders who has done just that over the last five years.”<\/p>\n

(Hyundai planning to step up the pace of product intros. <\/em>Click Here<\/span><\/a>for the story.)<\/em><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Online shopping site TrueCar.com plans to go public \u2013 a significant turnaround for a service some thought might not survive a series of legal challenges that forced some major changes to its business model over the last two years. TheDetroitBureau.com has the story.<\/p>\n","protected":false},"author":2,"featured_media":41784,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","footnotes":""},"categories":[8],"tags":[],"make":[],"post-state":[],"category_old":[151],"acf":[],"_links":{"self":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts\/74116"}],"collection":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/comments?post=74116"}],"version-history":[{"count":0,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts\/74116\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/media\/41784"}],"wp:attachment":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/media?parent=74116"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/categories?post=74116"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/tags?post=74116"},{"taxonomy":"make","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/make?post=74116"},{"taxonomy":"post-state","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/post-state?post=74116"},{"taxonomy":"category_old","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/category_old?post=74116"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}