Scott Painter’s ambitious venture, Autonomy, a subscription service offering all-electric vehicles, has unfortunately failed to gain traction. As he navigates the most challenging aspect of his vocation, he’s shifting gears again to tackle the “most arduous framework” of his career.
While Autonomy will continue operating its existing 1,000-vehicle fleet, built up over the past couple of years and separate from its previously stated goal of 23,000, Andrew Painter is spinning out a new company called Autonomy Data Services (ADS), he reveals in an exclusive interview with TechCrunch.
The innovative company is set to unveil a cutting-edge software platform, empowering automakers to launch their own subscription services for electric, fuel-efficient, brand-new, and even pre-owned vehicles. The entrepreneur is in negotiations with car dealerships, fleet management companies, and organizations offering agricultural equipment and machinery, exploring opportunities for subscription services. The company reports that its initial prototype has begun generating revenue.
Automaker giants are in secret negotiations with Painter, a pioneer in the automotive subscription space, alongside three industry leaders that have already successfully launched their own subscription services independently. The corporation is teaming up with Deloitte to deliver the service, under which ADS will receive an income share as the software-as-a-service provider, while Deloitte will charge automotive manufacturers and other clients a premium for customized platform solutions.
After a tumultuous few years, Painter navigates another significant pivot. Following his departure as CEO of TrueCar in 2015, after founding the company in 2005, Scott Painter went on to establish automotive leasing venture Honest, which secured more than $300 million in funding from SoftBank. The venture abruptly ended, with initial investors criticizing SoftBank for suffocating the corporation, ultimately leading to Painter’s resignation as chairman in 2021.
This unexpected shift wasn’t a straightforward affair at all.
To achieve this, Painter needed to convincingly persuade Autonomy’s buyers, some of whom had been left dissatisfied and underwhelmed due to the subscription service’s lackluster performance, which had failed to live up to its initial promise.
“According to our CEO, the company’s lenders held senior-secured positions, which essentially gave them the power to liquidate the fleet if needed to recover some or all of their investment.” Despite his efforts, he worked tirelessly to restructure and convert the $32 million worth of debt owed by Autonomy into equity through the issuance of ADS.
To personally fund his financial obligations, he had to “dig deep,” which entailed listing a luxurious $6 million beachfront property on the Pacific Coast Highway, securing another property as collateral, and reluctantly marketing multiple assets he was not eager to sell.
He recounts his entrepreneurial journey as a grueling experience, likening it to embracing a prickly cactus.
A six-figure acquisition for knowledge
When Elon Musk’s drastic price reductions took effect, Tesla’s struggles in the final 12 months were further exacerbated, ultimately devastating autonomy. According to Painter, despite his personal acquaintance with Musk, he has attempted to convey the significance of being more transparent regarding pricing discounts to Elon, only to be met with resistance.
While most major automotive manufacturers have experimented with subscription services thus far, Most individuals, upon consideration, chose to dismiss the notion entirely.
The painter notes that automakers’ lack of consistency and understanding of subscription services led to unexpected outcomes. He suggests that since the subscription providers were relatively new, they struggled to comprehend how customers would react. Will users commit to a limited subscription period of just a few months? Or a couple of years?
Without sufficient data, the notion of determining pricing can be overwhelmingly tiring; consequently, automakers imposed hefty fees for their subscription services, a development that deterred potential customers.
The sort of data that is among the issues he plans to address with Advanced Data Services (ADS). However, it’s not just a matter of Autonomy clients alone. For a fraction of its potential value, Painter discreetly acquired Shift Applied Sciences, a former used car market, in a private transaction valued at less than $1 million just this past year. Throughout the years preceding its downfall, Shift acquired Painter’s defunct car-leasing venture, Honest, which itself had previously purchased Ford’s subscription service, Canvas, thereby reacquiring the remains of his former business under his umbrella, as well as Uber’s Xchange.
According to Painter, data from various corporations can be leveraged to predict “how long people remain in vehicles based on their customer cohort, as well as factors such as FICO score and revenue levels, and so forth.” While flexibility is a key factor in attracting customers with lower credit scores, the true importance lies in the certainty it offers.
With the shopper’s intimate familiarity, Painter claims to have acquired the entirety of the supply code, patents, logos, and compliance-approved “work products” from these erstwhile companies, rendering it extremely feasible for ADS to seamlessly transition into and operate within new markets alongside its clients.
He estimates having received more than a terabyte, whimsically labelling it an “astounding deluge of digital detritus.”
When my IT team initially inherited a large number of outdated computers and equipment. He admits that his approach was simplistic: it merely stored incoming data. Despite his assertions, the companies responsible for generating this expertise collectively invested nearly a billion dollars in developing software, which he has acquired and is currently utilizing at ADS.
“When SoftBank CEO Masayoshi Son discovers that I had the opportunity to acquire all of Honest’s intellectual property and assets for under $1 million, I’m sure he’ll be furious,” he quips.
While he has secured $2.5 million in funding for the project, the task remains unfinished. “We have successfully completed all necessary steps to transform [ADS] into a viable investment opportunity.” Currently, we’re seeking a fair value partner to join us at a valuation of around $5-8 million, he explains. “That will provide the corporation with a two-year buffer before scaling up with Deloitte.”
