Slumping auto sales across the country don’t appear to be dimming growth plans for Vancouver-based online auto dealer Canada Drives Ltd.
Previous investors have agreed to provide the West Coast firm with another $10 million in capital following a $40-million raise this past June, according to a Thursday announcement.
The $40-million raise was led by Canadian consumer lender Goeasy Ltd. (TSX:GSY), which now serves as Canada Drives’ preferred non-bank financing provider.
The existing investors offering up $10 million in equity funding were not disclosed in Thursday’s announcement.
Canada Drives said in a release the new capital would help it expand into other markets in Canada.
A spokeswoman working on behalf of the company declined to specify which new markets are being targeted.
Canada Drives most recently entered into Saskatchewan this past spring after previously launching in B.C., followed by Ontario and then Alberta. The company said its services are available to more than 20 million people across the country, leaving the biggest untapped market as Quebec, where 8.5 million Canadians reside.
These expansion plans come as vehicle sales across Canada fell 4.5 per cent in September compared with the same month last year, according to DesRosiers Automotive Consultants Inc.
DesRosiers estimated 130,421 light vehicles were sold in September 2022 vs. 136,584 in September 2021. This drop in sales comes amid widespread semiconductor shortages that have made car manufacturing more challenging.
Honda Motor Co. revealed Thursday it was reducing manufacturing by 40 per cent at two of its plants in Japan owing to ongoing supply-chain issues.
Canada Drives, which has an inventory of 1,000 vehicles to purchase through its platform, said its sales are up 83 per cent year over year.
“Our strategic partners have seen how quickly we reached per unit profitability earlier this year and the continued progress since then,” co-CEO Cody Green said in release.
“We’re grateful to have strong strategic partners who understand our business and the scalability of our offering to Canadians.”
The company got its start helping consumers secure financing for auto purchases before launching its online sales platform in 2020. Customers can browse through an inventory of used cars, and then purchase a vehicle delivered in a trailer within a day of the sale.
Last year it raised $100 million in a funding round led by Honor Ventures as it sought to expand its operations beyond B.C. and Ontario.