Zag.com, a provider of online auto sales, has raised $37.4 million in venture funding today, as reported by peHUB. In an environment where car sales are down, and the automobile industry is failing, investors have faith in this company.
Amidst dealerships closing and the U.S. auto bailout, Zag reported in December of 2008, that its automotive retails sales were up 130 percent over December of 2008, and had increased 15 percent in one month from November of 2008. These undisclosed numbers were obviously enough for USAA to lead the funding round, backed by existing investors, Capricorn Investment Group, LLC, GRP Partners and Anthem Venture Partners.
According to Zag founder and CEO, Scott Painter, “Zag is thriving and growing even as both the auto industry and the economy as a whole are struggling. What the auto industry needs right now is innovation – not only in the products themselves, but also in the way they’re sold.”
Zag's solution to the traditional dealership model, is they claim to give dealers and buyers access to the same information. According to Zag's mission statement, they allow, "dealers to give buyers what they want most - a guaranteed upfront price and a context for how the price compares to what others are actually paying in the market." So Zag is not exactly a shopping site, but a transacation alternative.
Zag, based out of Santa Monica, California was founded in 2005, and with this round has raised over a total of $95 million in funding.
