(Bloomberg) -- Tekion Corp., a company that provides technology for automotive businesses, has notched a more than $4 billion valuation following an investment from Dragoneer Investment Group.
The size of the financing is $200 million, said co-founder and Chief Executive Officer Jay Vijayan.
Vijayan, who previously worked as Tesla Inc.’s chief information officer, started Pleasanton, California-based Tekion in 2016. Vijayan says he saw an opportunity to provide software and other technology for manufacturers, retailers and other automotive industry players. Since then the company has raised $441 million in total financing from investors including Index Ventures, BMW i Ventures and Advent International.
Mike Volpi, partner at Index Ventures, said that he first invested in 2016 because of the large market opportunity. “Selling cars is a big chunk of the American GDP” and the industry needed better technology, he said. At this point, the startup has grown so much that it’s “on its way to being a publicly traded company” within the next two to three years.
Volpi said that he sees significant growth potential for Tekion because there are still a lot of prospective customers, especially as car dealership ownership consolidates. “It is a company that will achieve revenue in the billions at some point in time,” he said.
Tekion now has between $100 million and $200 million in revenue, Vijayan said. The CEO also said that there is still significant opportunity for expansion, noting that the company is selling its technology to more car dealerships. Its dealership customers include Asbury Automotive Group as well as Longo Toyota and Lexus.
While Tekion is not yet profitable, it has “a goal to get to break-even by next year,” Vijayan said. An eventual IPO is likely, but the company isn’t in a rush, he said.
“Automotive customers increasingly seek frictionless, digital-first experiences and automotive retailers seek competitive advantages, business efficiencies and deep insights from powerful new technologies,” Christian Jensen, a partner at Dragoneer, said in a statement.
Tekion will use its latest cash influx to expand its product offerings for car dealerships, and also improve its customer support experience.
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