Fair.com

Fair.com was founded in 2016 by Scott Painter and others to offer flexible car leasing via a mobile app.³⁶⁷ The company raised over $2 billion in equity and debt, reaching a $1.2 billion valuation, but faced financial difficulties and layoffs in 2019.⁶⁷¹³ Fair completed a merger and acquisition with Shift for $15 million on May 12, 2022.¹¹

Timeline

Money raised

Fair raised a $16 million Series Seed round on September 19, 2016, with investors including Archer Venture Capital, Charles River Ventures, Foundation Capital, Javelin, Moonshots Capital, and Sherpa Capital.¹¹ Fair raised a $55 million Series A-1 round on October 20, 2017, with investors including 3rodeo, BMW i Ventures, G Squared, Mercedes Benz, and Penske Automotive Group.¹¹ Fair raised a $50.59 million Series A-2 round on February 5, 2018, with investors including 137 Ventures, Black River Ventures, BMW i Ventures, CreditEase, Cross Culture Ventures, Exponential Ventures, FJ Labs, G Squared, Hambro Perks, Idealab, MicroVentures, Millennium Technology Value Partners, Next47 Ventures, NWS Holdings, Obvious Ventures, Taurus Ventures, University Growth Fund, and Upfront Ventures.¹¹ Fair raised a $446.3 million Series B round on March 1, 2019, led by SoftBank, with investors including Advantage Ventures, CreditEase, Ergo Partners, Expanding Capital, Exponential Ventures, G Squared, Munich Re, and SoftBank, at a post-money valuation of $1.26 billion.¹¹ Fair used a secured loan facility provided by Goldman Sachs Bank USA to purchase the existing lease contracts and vehicles of Uber's Xchange Leasing subsidiary in January 2018.¹⁴¹⁶ Fair raised more than $2 billion in equity and debt, according to Crunchbase, valuing the business at $1.2 billion.⁶ SoftBank invested $385 million in Fair's Series B round.⁶⁷ SoftBank has a $500 million equity stake in Fair, according to CEO Brad Stewart.¹³ Fair completed a merger and acquisition with Shift for $15 million on May 12, 2022.¹¹

Investors named in the sources: SoftBank⁶⁷¹¹¹³, BMW i Ventures^11141516, G Squared^11141516, Upfront Ventures^11141516, next47¹⁴¹⁵¹⁶, CreditEase FinTech Investment Fund¹⁴¹⁵¹⁶, Millennium Technology Value Partners¹⁴¹⁵¹⁶, 137 Ventures¹⁴¹⁵¹⁶, Goldman Sachs Bank USA¹⁴¹⁶, Archer Venture Capital¹¹, Charles River Ventures¹¹, Foundation Capital¹¹, Javelin¹¹, Moonshots Capital¹¹, Sherpa Capital¹¹, 3rodeo¹¹, Mercedes Benz¹¹, Penske Automotive Group¹¹, Black River Ventures¹¹, Cross Culture Ventures¹¹, Exponential Ventures¹¹, FJ Labs¹¹, Hambro Perks¹¹, Idealab¹¹, MicroVentures¹¹, NWS Holdings¹¹, Obvious Ventures¹¹, Taurus Ventures¹¹, University Growth Fund¹¹, Advantage Ventures¹¹, Ergo Partners¹¹, Expanding Capital¹¹, Munich Re¹¹.

What happened

Fair.com was founded in 2016 by Scott Painter, Georg Bauer, and Fedor Artiles.¹³⁶ Scott Painter previously founded TrueCar and other automotive startups.³⁶⁷ Fair aimed to provide flexible car leasing through a mobile app, allowing customers to choose a car, sign with their finger, and drive for as long as they want with no long-term commitment.³⁶¹⁶ Fair's model involved buying cars outright and leasing them to consumers on a monthly basis.³⁶ Fair completed its expansion to all major markets in California and planned to launch nationwide by the end of 2018.¹⁶

In December 2017, Fair agreed to acquire Uber's U.S. auto-leasing business, Xchange Leasing.⁴⁷ In January 2018, Fair completed the purchase of Xchange Leasing's lease contracts and vehicles using a secured loan facility from Goldman Sachs Bank USA.¹⁴¹⁶ Fair entered into an exclusive, long-term partnership with Uber to provide vehicles to ride-share drivers.¹⁴¹⁶ In February 2018, Fair acquired vehicle-delivery app Skurt and integrated its technology and team.¹⁴¹⁵¹⁶ Fair raised significant funding, including a $385 million Series B led by SoftBank in late 2018, valuing the company at $1.2 billion.⁶⁷

Fair grew rapidly, expanding into new markets and hiring hundreds of employees, reaching around 700 employees by 2019.⁶⁷ Fair acquired Ford's Canvas subscription platform in July 2019.⁶⁷ Fair launched an ambitious project internally known as 'Shasta' to provide cars to Uber drivers on a weekly basis.⁶ Fair faced operational challenges, including difficulty tracking its fleet of cars, which was managed using Google spreadsheets.⁶ Fair's burn rate was high, and by late 2018, employees recalled Painter worrying that Fair was running low on cash and in arrears on payments to some vendors.⁶

In October 2019, Fair laid off 40% of its workforce and announced a restructuring.⁶⁷¹³ Scott Painter resigned as CEO on October 30, 2019, and was replaced by SoftBank's Adam Hieber as interim CEO.⁷ Fair was subject to audits by backer SoftBank and began selling off cars.⁶ In February 2020, Fair announced it was putting the brakes on weekly car rentals for Uber drivers.¹¹ In May 2020, Fair appointed Bradley Stewart as CEO.¹¹¹³

Under Stewart, Fair shifted strategy to offer longer-term leases of two and three years to reduce monthly payments for customers.¹³ Fair focused on providing more affordable vehicles and improving its digital merchandising.¹³ Fair completed a merger and acquisition with Shift for $15 million on May 12, 2022.¹¹ After the merger, Fair became a publicly traded company through Shift.¹¹

Where the founders are now

Scott Painter resigned as CEO of Fair on October 30, 2019, and remained as chairman.⁷¹³ Scott Painter founded Fair in 2016 after founding and selling TrueCar.⁷

Lessons, as others put them

"Mistakes were made and investors and managers have realized that."Brad Stewart, CEO of Fair¹³

Sources

1. Used-car marketplace Beepi shuts down outside of CA, merges with stealth Fair.com | TechCrunch, TechCrunch, 2016-12-07
3. Names with stories: The story behind Fair.com, Smart Branding, 2020-11-29
4. Uber to Sell U.S. Auto-Leasing Business to Startup Fair.com, wsj.com, Dec 26, 20
6. This SoftBank-Backed Startup Sought to Disrupt the Car Market. Instead, It Became a Poster Child for Disruption Gone Awry | Fortune, Fortune, Dec 19, 20
7. Founder of SoftBank-backed car leasing startup resigns after layoffs, The Verge, 2019-10-30
11. Fair IPO Timeline and Financing Details - Forge, forgeglobal.com
13. Fair Shifts to Long-Term Vehicle Leases After a Bumpy Start - dot.LA, dot.LA, 2020-09-17
14. Fair secures more funding, also buys car-delivery app Skurt, Auto Remarketing
15. Fair nabs funding of around $50M, acquires rental car delivery service Skurt | TechCrunch, TechCrunch, 2018-02-05
16. Fair Builds on Momentum with Latest Capital Raise Led by next47 and Strategic Acquisition of Skurt, prnewswire.com, 2018-02-05

How this case file was put together

Every statement on this page carries a numbered note, and every note points to a court record, a regulatory filing or a named publication in the list of sources. Each statement was checked against the text of the sources it cites before it was published: a figure, a date or a name the cited source does not contain was cut rather than kept. Allegations are shown as allegations, with their status at the time of the source (filed, charged, convicted, pleaded, settled, dismissed or pending). Quoted lessons are the words of the person or publication named with them, copied from the cited source; nothing here is our own opinion of why the company failed.

If a fact on this page is wrong, use "Report an error" below and attach the record that shows the correct fact. Every report is reviewed by a person before anything changes, and a corrected page says when it was last corrected.

All case files2022automotive fintech