Shift’s Founding Story: Reflecting on our History for this New “Day One”

By George Arison & Toby Russell 

Co-CEOs, Shift

We are excited to announce that Shift is now a public company, trading on Nasdaq under the ticker symbol SFT. This comes four months after we announced plans to become one of the first companies in Silicon Valley to pursue a Special Purpose Acquisition Company (SPAC) transaction by combining with Insurance Acquisition Corporation, a SPAC sponsored by Cohen & Company. 

As founders, both of us believe that the best way to build a company is charting the path to take it public. Of course for most entrepreneurs, this never happens, since so few companies, including the very successful ones, ever get the chance to be in the public market. We are so very fortunate to be reaching this milestone less than seven years since being incorporated, and just 26 quarters since selling our “first” car. 

Getting the company to this stage is an incredible team effort and we wanted to recognize and congratulate everyone whose contribution has played a part in making this happen. We owe a tremendous thank you to Shift’s current and past employees who believed in the company’s vision to transform the auto industry for good and have worked so hard to pursue our mission to make car purchase and ownership simple and accessible to everyone. We are so very appreciative of everyone keeping the eye on the ball and executing. Without you, Shift could not be where it is and today would not have been possible. 

We also owe a deep appreciation to all of our customers. There is tremendous joy in delighting users and helping them improve their lives through a purchase of something that is so consequential. A car is, after all, a means to get around, to get to and from work and school, to take family trips, to make life happen. And a car is the largest single item most Americans will ever own outright. Finding and buying the right car should be a fun and fair experience. We are grateful to all the customers who have used the Shift way to buy or sell their cars. 

Lastly, Shift would not be possible without the trust and support of the many investors who have been with us on this journey. Thank you to everyone who has been willing to put the necessary capital investments behind our project, from our earliest investors in our seed round to investors who supported our SPAC transaction, and everyone in between.

Our road has not always been easy; it has come with many ups and downs. At our core, we’ve always believed that the seemingly impossible can be made possible — that we could achieve what most thought could not be done. To do this, we’ve been helped by a lot of grit and determination. This is a great time to take stock of what we’ve accomplished and celebrate this big win.

Being public, of course, is not the end of our journey, but rather, the beginning of a new chapter in our company’s growth. In the coming months, quarters, and years, we need to continue to be laser focused on execution, on delighting customers, on hitting numbers, and on creating shareholder value, like we have been as a private company. Through this transaction we raised capital that will allow us to invest in scaling our business and ensure that more and more customers have an opportunity to experience the Shift way of buying and selling their cars. As a company, we have always been judicious about our spend, and we will continue to be so in the future, even as we invest in building a stronger brand, expanding our operations, creating new technology, and launching new markets. 

For now — we wanted to congratulate everyone who has been part of our journey. We are deeply grateful and look forward to a great future as a public company!

As we make this transition, we’re reflecting too on our founding story — how Shift all got started. 

A little over nine years ago, the two of us were having one of our regular weekend conversations about company ideas when Toby told George about the challenges he was having buying a car. Toby wanted to go to a specific dealer (a huge company he had used a couple of times before) and finance the car using the bank where he worked, but the bank would not work with the dealer, so the transaction could not go through. As it turned out, George had just gone through a very similar experience trying to get a loan to buyout his leased vehicle — all the banks directed him to a dealer to get a loan, and the dealer eventually approved him for a loan with the very banks that said no to him earlier. 

These experiences got us wondering why dealers had so much control over the auto financing process. We started to investigate, and spent nearly two years talking to dealers, auto lenders, customers who bought cars at dealerships, and individuals who engaged in private party transactions. We realized that there was a huge opportunity to use technology to transform the car purchase experience. 

In mid-2013 George started to work on the idea full time, initially contacting car sellers on Craigslist, trying to get them to engage on the first product concept: to offer their prospective buyers a warranty. It was during these interactions that sellers would ask if we’d be willing to take their cars and sell them on their behalf. The whole concept seemed crazy since the team was working out of George’s apartment, was using Toby’s and George’s savings to fund the testing, had no insurance, and would need to park cars on the street. Yet, by end of the year we had about a dozen cars parked on the street in the Castro district of San Francisco that we were trying to sell. 

Shift has come a long way since then. It has been our continued determination to build a thriving company that outlasts us that has gotten us here, and we are excited to be listing on Nasdaq. And while it was a thrilling road to get to this point, the best is yet to come. To paraphrase the great Jeff Bezos, from whom we’ve learned so much, reset your clocks, Day One starts now. 

– George and Toby 

 

Shift Adds New Directors to its Board

Today we are excited to announce three new members of Shift’s Board of Directors as we prepare to complete our de-SPAC process and become a public company: Adam Nash, Kellyn Kenny, Victoria McInnis. Adam has been formally on our board since May, when we started the SPAC conversations, and Victoria and Kellyn will be joining concurrently with our public listing. 

Over the years, we’ve been thinking about how we wanted the board configured as the company grows. As a soon-to-be-public company, there were several factors we deemed critical in choosing these members, including:  

  • Technology and product experience: Shift is, at its core, a technology innovator, and we believe it is critical to maintain that DNA on the board as we scale. Adam has paved the way for groundbreaking consumer technology products, serving as CEO of Wealthfront, early Vice President of Product at LinkedIn, and Vice President of Product at Dropbox. Adam has been an angel investor in Shift from the earliest days, and he has been a valuable voice on the board throughout the period that we’ve been working on the SPAC transaction. We are excited to have a strong product and technology voice among our directors as we continue to create amazing products for our customers. 
  • Brand marketing experience: A key part of Shift’s go-forward strategy is to use a variety of tactics to build our brand, both in our existing markets and new markets as we enter them. Because of this, having a board member  with a strong marketing background is valuable. This is why we are so excited about Kellyn, who as the most recent CMO of Hilton has extensive marketing leadership chops, and has over her career worked on building iconic consumer brands such as Capital One (one of the largest automotive lenders and stand out brand in a considered purchase category), Uber, and Microsoft.
  • Audit and financial controls experience: As a public company, we will face a new level of requirements as related to our internal controls and audit. To this end, having an audit chair who has intimate experience with managing the audit process and can help us implement the right procedures for Sarbanes-Oxley is critical. Victoria has incredible experience in these areas, as Vice President for Internal Audit and Chief Tax Officer at General Motors. In addition to her audit experience in the automotive industry, she has been part of a SPAC transaction, so has experience with the type of transaction we are doing for Shift.  She will be a fantastic addition to our board on a strategic level and as Chair of our Audit Committee. 

We still have two board seat searches ongoing that we will aim to fill in the coming quarters. These are build around these key criteria: 

  • Public company CEO and founder experience: We believe that Shift and our senior management would benefit greatly from a board member who has extensive experience as a CEO and company builder of a public company, who can help us think strategically about our long-term objectives and how to build a lasting company, and be a strong mentor and coach to us as we grow the business. 
  • Public capital market experience: As a public company, Shift will be an active participant in public capital markets. We see great benefit in bringing on a director who has deep relationships in the financial markets and can help us navigate the many nuances and complexities that come with being a publicly traded company. This could be either an experienced and well respected CFO, an investment banking leader, or a former CEO who navigated capital markets extensively. 

In the coming quarters, we expect that certain of our existing pre-public board members will transition out, after many years of dedicated service to Shift, and we will look to replace them with directors who can further round-out the board by bringing a new set of backgrounds and experiences to the table. As we have previously, our goal is ensure that we have a diverse board and we are able to draw on candidates with varying backgrounds. 

We also want to express deep gratitude to Emily Melton and Manish Patel, who have served on Shift’s board for nearly six years, to Jason Krikorian, who has been an investor for six years and a board member for two, as well as to our previous board members who have served Shift over time, for all the hard work that they have put in over the years to help Shift succeed. We appreciate Emily, Manish, and Jason’s willingness to stay on the board for the next few quarters helping ensure continuity as we onboard new directors.

We couldn’t be more excited to welcome Kellyn, Victoria, and Adam to our team as we continue to build the platform for making car purchase and ownership simple and accessible to everyone. The added strength, diversity and leadership they bring will be invaluable as we become a public company.

Best, 

George and Toby 

Shift is going public this year

Shift to go public later this year by agreeing to combine with INSU today

We are very excited to announce that Shift has entered into an agreement to combine with a special purpose acquisition company (SPAC) called Insurance Acquisition Corp. (NASDAQ: INSU).

As part of the business combination, INSU has raised $185MM in commitments from investors to purchase INSU equity capital, which cash would be available to the combined company following the completion of the business combination, in addition to potential proceeds from the SPAC trust, which currently stands at >$150MM.

We last wrote on our blog in late March when we had to announce some very painful decisions that affected our team and business stemming from the COVID pandemic and economic uncertainty. Facing some of the most challenging headwinds we could have ever imagined, our team nonetheless persevered, continuing to service our customers as they searched for alternative means of transportation. To be here now, announcing this milestone, is a testament to our incredible team that has worked so tirelessly to bring Shift to this stage.

Shift started selling cars in 2014 with a mission to simplify buying and selling of used cars. Offering consumers a complete car buying and selling relationship, it has combined a powerful technology platform with an omnichannel sales approach to redesign the car buying experience, especially through our patented test-drive-delivered-to-customer service. By combining its ability to quickly and accurately evaluate, price, recondition and sell cars across the entire value spectrum with its unique white glove service, Shift has seen meaningful market penetration in its core markets as customers appreciate the breadth of selections and convenience.

This transaction represents a tremendous opportunity for our company. Once completed, we expect it to significantly enhance our ability to scale our technology and operations, accelerate our growth, and continue on our mission to make car buying simple, fair and accessible to all. We are targeting to finalize the combination toward the end of Q3’2020, following the SEC review process and the completion of various conditions to closing, including among other things certain regulatory and stockholder approvals.

We want to close out with a huge shout-out to the many people who’ve helped us along the way. We’ve known each other for nearly 25 years, and each of our journeys in life and business reflect the incredible promise and opportunity of our wonderful country, in which entrepreneurship is able to flourish unlike anywhere else. None of this would be possible without the support of so many who have been with us along the way, both at Shift and in life. From our teachers and mentors, to our investors, to the hundreds of team members who have worked at Shift over the years, to our families and friends who have put up with us working non-stop hours, we owe a huge thank you.

Of course, today’s announcement is a big deal for Shift, but the hard work does not stop now. We are excited about what lies ahead. Onward!

George & Toby

Continue reading “Shift is going public this year”

Finance First Credit

Finance First Credit – Terms & Eligibility

Shift customers may be eligible for a $400 finance credit if they meet all of the following requirements in this order:

      1. Apply and be approved for a loan through Shift before your scheduled appointment.
      2. Buy the car during their first test drive appointment.
      3. Obtain Shift financing during the first test drive appointment.

Promotion begins 6/18/20. Cannot be combined with another promotion. Cars purchased online are not eligible. Prequalification does not apply. Customers who do not get approved for financing, do not obtain financing through Shift or who do not apply for financing prior to a test drive are not eligible. Customers must purchase the vehicle at the time of their first appointment to be eligible for this promotion. Promotion credit subject to change without notice.

Helping Essential Workers During the COVID-19 Crisis

We know many of you, especially essential workers, still need safe, reliable, and affordable transportation while this crisis continues. We also recognize just how many people in our community have been adversely affected by it already. And with the current restrictions in place, Shift is for many people the only way to test drive and buy a car directly online right now, and will be for the near term. 

We want to help. That’s why we’ve created the Essential Workers Program and the Community Pricing Initiatives to help you get back on the road in the meantime.  

How does the Essential Workers program work? 

This program is intended for customers who are considered essential and frontline workers during the coronavirus including grocery store staff, utilities operators, government employees and medical professionals. If you feel you fit the description, please let your Shift representative know at the time of or before your appointment and they will confirm your discount status. 

This program will apply to cars both for local test drive appointments and cars purchased online, and will continue for as long as strict public health directives are in place. (Subject to change.)  This is an honor system, and will operate on a discretionary and availability basis, so please be advised that we cannot guarantee your discount status until your appointment. 

Here’s what services Shift is offering during the coronavirus closures

What is the Community Pricing Initiative? 

While Shift is one of the only places open on the market right now to buy a car, we recognize that many people in our communities have been adversely affected by the crisis. So we created a special, temporary price adjustment to give those in need an opportunity to buy cars at a discounted price. This is a first-come, first-served offering on vehicles currently available. The temporary pricing has already gone into effect, so the list price you see on a car’s vehicle listing page has been updated with the lower price.

Please let us know how else we can help. We’re all on this road together.

 

Stay safe,

Shift

Coronavirus Impact on Business: How We’re Dealing With It As Startup Founders

The ones who survive this are the ones who act decisively

The coronavirus impact on business the world over has already been monumental. As it has for almost everyone else across the country, the ongoing pandemic has had a huge impact on Shift, our employees, and our customers. The entire auto industry — indeed many industries — is facing lower demand across the board right now.

The Shelter-In-Place orders as well as the economic crisis that has developed as a result of the outbreak has forced us to take extremely difficult steps to ensure our company’s long-term durability.

We have had no choice but to furlough or reduce hours of close to 50% of our operations teams across the business. We have been able to ensure that furloughed employees will receive Shift’s excellent health benefits, and no employee has been furloughed because of sickness.

Additionally, we’ve had furloughs on the corporate level, while all of our salaried employees will be taking a 25% reduction in salary for at least eight weeks, though the timeline of this will be assessed as this crisis continues.

Taking these measures breaks our hearts. However, we are decisively taking these serious actions now to position Shift to weather this storm and come through it stronger. We extend our deepest sympathies and gratitude to the furloughed employees, some of whom volunteered, and we hope that all will return to Shift once we’re through these difficult times. As this crisis environment continues and we assess demand, it is possible we have to go further than this, but we hope to see higher demand than we had anticipated. If this happens, we would be able to bring our team members back to work. We are hopeful Congress passes the Keep Workers Paid Act quickly, and that measures in this legislation would allow us to reassess some of the steps we have been forced to take.

The Steps Shift is taking on COVID-19

Six years ago, Shift invented the concept of allowing a customer to shop for a car online, have a test drive delivered to them at their house, and complete the purchase fully digitally. We also offer the functionality to sell their car fully online. We are confident in Shift’s resilience and fortitude to continue serving customers over the long term because of these unique features. In the current environment, we believe that the need for privately-owned transportation options will increase dramatically, while demand for used cars will jump substantially (coupled with fall in demand for new cars). As a company, we will do everything we can to service customer needs through our test drive and purchase delivery capabilities.

We are currently living through a situation that is totally unprecedented. These times have also brought out the best of who we are as a team. We are encouraged by the stories of Shift employees looking out for each other, be it through covering shifts for a coworker who has to stay home to take care of their children, or the innovative practices we are adopting to ensure the health and safety of our colleagues and customers.

We want to thank our customers for bearing with us during uncertain times. We will do whatever we can to continue giving everyone safe access to reliable transportation throughout this period.

And we want to thank our employees for their continued hard work, adaptability, and dedication to their teammates, to our customers, and to the business.

Together, we’ll get through this.

Toby Russell & George Arison

Co-CEOs, Shift

A Message from Shift Co-CEOs on COVID-19

Like many of you, we’ve been closely monitoring the developing situation around the coronavirus (COVID-19) outbreak and have been impacted by it. We recognize that transportation needs will continue as this crisis unfolds and are as committed as ever to helping you get where you need to go. 

The health and safety of our employees and customers is a top priority, and we want to take a moment to let you know what we’re doing to help.

For the time being, we’ve made the difficult decision to close some of our physical hubs to any customer visits. However, you can still buy a car with us without leaving your driveway.

Here’s what you can do:  

  • Shop online: We’ll bring the car to your home to test drive (virtual test drives are also available). *UPDATE: In support of social distancing, we are now offering No-Contact Test Drives. Your Shift Concierge will bring the car to you, wipe down the car and keys, and then hand it off to you to take it for a spin. 
  • Purchase online: We’ll drop the car off and waive up to $350 of any shipping fees during this time.
  • Sell us your car: We’ll come to you to evaluate it.

In addition, we’ve implemented the following procedures for the safety of our customers and staff:

  • Monitoring ongoing updates on COVID-19 from public health officials.
  • Following recommendations for reducing the spread of germs, including frequent, sustained hand-washing and using hand sanitizers. Our Car Concierge team will refrain from shaking hands or other close-proximity interactions. 
  • Disinfecting all vehicles before and after each test drive and frequently touched surfaces at our gated storage facilities multiple times per day — that includes things like common use areas; all car keys and iPads; and car door handles and steering wheels. 

Finally, we want to give a special thanks to our Car Concierge team who are going above and beyond in continuing to serve those customers in need of transportation options. 

We hope these measures and services can help alleviate some of the stress and burden during this time and encourage you to reach out if there’s anything further we can do.

Thanks as always for working with us. 

Toby Russell & George Arison

Co-CEOs

We Expanded our Coverage Area

We know that selling a car is a big decision, which is why we emphasize a great seller experience. At Shift, there are no shady deals and no negotiation hassle. We take care of the legwork and get you a better price, which frees you up to live your best life. We’re excited to announce that we are bringing our delightful seller experience to even more areas in Northern and Southern California.

Continue reading “We Expanded our Coverage Area”

Announcing Our Latest Fundraise

It was just a little over three years ago that we sold our first Shift car in San Francisco. Since that time, we’ve become the number one used car seller in the Bay Area, grown our team by 100x, and expanded to several new markets. It’s been a wild ride.

And thanks to some recent financing by leading investors, we’re in it for the long haul. Last month, BMW iVentures, DCM, G2 Ventures, Goldman Sachs, and Highland Capital invested more than $38 million in Shift’s Series C. To date, we have raised more than $110 million. Continue reading “Announcing Our Latest Fundraise”