We write a lot about customer experience here on Localogy Insider. In particular, we make the point, repeatedly, that the “modern consumer” will simply no longer tolerate old school customer service. You know what we mean. Voice mail over texting. Hand-written receipts over paperless. Cash or checks over mobile payments. Opacity over transparency. And few small business categories have as old school a reputation as the independent auto repair shop.
AutoLeap, a new (six-month-old) Toronto-based company, aims to help local auto shops modernize and automate the customer experience they deliver. And it has recently raised a $5 million seed round to make that happen, according to TechCrunch.
Of course, as with so many things, the COVID era appears to be incentivizing Luddite car-repair shops finally to get with the program and digitize how they do business. The need for contactless service — including payments and interactions with service pros — has collided with the longer-term trend towards seamless, transparent CX. This convergence suggests now is the time for car-care SaaS to shine.
AutoLeap’s proposition is to help car repair shops digitize their businesses. This will help them improve every aspect of their business, the pitch goes, from customer acquisition, though service and experience, through to getting paid faster and managing the money. In fact, it boils its offering down to three elements: Grow Your Business, Impress Your Customers, and Organize Your Shop. Very easy to wrap your head around the value prop with that simple messaging.
Modernizing the Corner Garage
The company is emphasizing all the pieces of this value chain. But we find its focus on improving CX particularly powerful, given the car repair category’s backward reputation.
For example, offering customized notifications, digital estimates, and seamless payment is such a leap forward from the old model of waiting for Jim to call you and deliver the bad news about how much the repair will cost. And then, of course, experience that blank look from Jim when you ask if he’ll accept Apple Pay. We’d love to see something that allows the customer to monitor the repair process at every step, perhaps with a series of photos texted to the car owner. Or the ability to monitor repairs via a live video link. Perhaps that’s part of AutoLeap 2.0. Or maybe 3.0.
AutoLeap’s founders bring meaningful experience to the venture. The two, Rameez Ansari and Steve Lau, were formerly co-CEOs of a SaaS company for contractors called FieldEdge. So they’ve learned how to work with small business owners that get their hands dirty on a daily basis. And, as TechCrunch points out, the company’s investors bring serious auto industry cred. For example, Shift co-founder George Arison; ex-GM CEO Rick Wagoner; and Ned Aguilar, a former senior Bridgestone executive.
Not Leaping Alone into Car Repair
AutoLeap is hardly the first company to use technology to save repair shops from themselves. The list of all-in-one platforms for auto repair shops is long. Shop-Ware, to give just one example, raised a $15 million Series A round in September. The SaaS company provides a platform to digitize auto shop operations. A September article in TechCrunch covering that funding round also made the point that COVID has opened up the investor purse strings for auto repair platforms.
And some of AutoLeap’s competitors come at the sector’s need to modernize from different angles. For example, about this time last year, we wrote about Wrench raising $20 million to ramp up its on-demand car repair platform. Don’t make us say, “it’s the Uber for car repair.” Here is how we described Wrench last year:
The way Wrench operates is that it connects mechanics to service requests in real-time. Service trucks arrive at customers’ homes with tools that are based on owners’ descriptions of the problem, in addition to diagnostic software. Each visit comes with a 12,000-mile warranty and vehicle inspection.
Wrench’s business model seems to have remained roughly the same since then. Although it has added a very, very COVID car sanitation service. The company is using partnerships to help it scale. Most recently, the company teamed up with Openbay to offer its services through Openbay’s network of both consumers and fleet operators. Openbay is both a marketplace and a set of SaaS tools for auto-repair shops.
Plenty of Greenfield
We are not surprised to see this space get some attention from investors. This is a huge space, after all. According to Statista, there were about 233,400 auto repair and maintenance centers in the U.S., in Q1 2020. That’s a 1.7% increase over the previous year. Even though there are multiple players going after this category, it’s vastness suggests a lot of greenfield remains. And as with small businesses across the spectrum of categories, as older owners retire, their successors will feel compelled to modernize. Add the COVID pressure for contactless everything to these existing tailwinds and you have a robust opportunity going into 2021.