Silversmith Leads $104 Million Investment in Software Startup Impel
The firm joins Wavecrest Growth Partners in backing the maker of AI-based applications for car dealers
By Maria Armental
Growth investor Silversmith Capital Partners led a $104 million investment in Impel, whose technology and data crunching helps power car-buying online. Existing investor Wavecrest Growth Partners also participated in the latest cash infusion in the company, legally called Augmented Reality Concepts Inc. Syracuse, N.Y.-based Impel intends to use the growth investment primarily for product development and to expand through acquisitions.
Started in 2014, the company benefited from an influx of online car shoppers as dealerships closed showrooms when the coronavirus pandemic took hold in 2020. Many dealers also faced staff shortages and turned to technology to aid consumers browsing their websites, said Devin Daly, Impel’s chief executive and a co-founder of the business. The company uses data mining and artificial-intelligence technology to shape online experiences that dealers provide to consumers through their websites. Impel’s systems let prospective car buyers explore a vehicle’s interior and exterior virtually and zero in on desired features, for example.
Impel’s technology helps dealers analyze data derived from customers’ online behavior to personalize offerings and pitch additional products, Mr. Daly said. The company says it has more than 4,000 customers and over 100 technology and marketplace partners. The company uses “cutting-edge technology to solve everyday problems,” according to Todd MacLean, a managing partner of Boston-based Silversmith. He is joining Impel’s board of directors concurrent with the investment.
Mr. MacLean said Impel’s products are helping a large sector of the automotive services market that has yet to fully embrace digital technology and offers the potential for substantial growth and a strong return on the investment. Silversmith made the minority investment from its latest fund. The firm manages about $3.3 billion and typically invests as much as $125 million per deal in software-as-a-service, healthcare information technology and related services, according to its website.
In 2018, Wavecrest, also located in Boston, led a $22 million growth investment in the company, then called SpinCar. Auto and tech industry veterans David Metter and Harpreet Grewal joined that transaction and remain independent advisers to the company. Impel’s technology “made a meaningful impact on the way in which vehicles are sold,” said Deepak Sindwani, a Wavecrest managing partner. The company had more than $50 million in annual recurring revenue last year and has been profitable for the past two years. Mr. Daly said the goal is to reach $150 million in annual recurring revenue before the end of 2026.
Potential growth areas include automotive accessories and financial products tied to vehicles, such as financing and insurance. Mr. Daly said those are “two big areas [where] dealerships are leaving money on the table.” Most motorists buy car and truck accessories from sources other than dealerships and the brands they represent, which Mr. Daly described as “a major pain point that manufacturers have been trying to tackle for a very long time.”
Mr. Daly and Silversmith representatives declined to comment on the deal’s valuation of Impel. But Mr. MacLean said that it had “grown dramatically” in the last couple of years. “We’re really bullish on the long-term prospects,” Mr. MacLean said.
