Santa Monica, California based Zag, an auto-buying service that lets people buy cars at a discount through affinity organizations like AAA, has raised a monster round of financing – $32.4 million. The round was led by USAA, a financial organization for U.S. military personnel with 6.4 million members. Existing investors Anthem Venture Partners, GRP Partners and the Skoll Fund co-invested in the funding round.
USAA has been an affinity partner of Zag’s since 2007 – 22,000 USAA members have purchased cars through the Zag service, the company says, saving them $115 million v. MSRP.
Zag was founded by Scott Painter, a long time auto-industry guy. Painter also founded True Car, which launched at TechCrunch50 in 2008.
This is a great sign. Dealers need to be completely transparent to get the trust back from the market and this helps them do that.
Dealers should also be much more open about maintenance and repairs that they usually overcharge for.
There are many things that happen after the initial purchase that dealers should also be sure to improve to show they value the customer.
Congratulations to Zag.
Every company should have a department that service to government and enterprise.
Even when your main business targets are responding according to the economy, money for good services will always be in this sector.
Now it’s time for me to raise some money for http://www.takeoverpayment.com …especially that there could be many people who wants somebody else to take over payment of their car.
Nice to see positive stories like this…..businesses still chugging along….people still investing…..when there is so much negativity elsewhere in the news.
Ouch, Zag.com is painful to look through.
Flash is wonderful in small doses, but an entire site in it? oye vei…
Their business sounds pretty solid, but I’d prefer if they partnered with a company like AutoTrader.
I wonder what other companies they plan to partner with in the future, if they are listening, I would recommend employee discount companies like NextJump.
The concept won’t work.